AGP Executive Report

Defence & NATO: UK, Ukraine, France and Germany urged an “immediate and complete ceasefire” after Russia’s Oreshnik missile strikes, while also pushing for faster production of interceptors and deep-strike capabilities ahead of the NATO summit in Ankara. Middle East Energy & Trade: The US Treasury expanded sanctions on Iran-linked LPG shipping, blacklisting six more carriers and adding Turkish-linked individuals tied to UAE-based “shadow fleet” trade. Regional Security: Iran launched missiles at Israel for the first time since an early-April ceasefire, with Israel saying it intercepted the barrage but warning its defences aren’t “hermetic,” as Beirut was hit despite ceasefire hopes. Turkey’s Business Angle: Iraq says it will boost oil exports via alternative routes through Syria and Turkey to 650,000 barrels per day, including higher Kirkuk flows through Ceyhan. Sports & Economy: Galatasaray reportedly targets Jhon Duran and Randal Kolo Muani to deepen its attack alongside Victor Osimhen, signaling another busy transfer push. Elections & Geopolitics: Armenia’s ruling Civil Contract led early parliamentary results with 54% as the vote tests Pashinyan’s Westward pivot.

Turkish Banking Watch: Türkiye’s lenders posted net profit of TRY 363.6bn in Jan–Apr 2026, up from TRY 264.2bn a year earlier, as assets rose to TRY 50.4tn and the NPL ratio edged to 2.65%. Monetary Policy: The Central Bank’s Monetary Policy Committee is set to meet June 11, with most analysts expecting the policy rate to stay at 37% amid May inflation ticking up to 32.6%. Islamic Finance Push: Vice President Cevdet Yılmaz said ethics-based and Islamic finance can support growth and that Türkiye is working to strengthen Istanbul’s role as a financial hub. Tourism Momentum: KPMG’s report says Türkiye beat European rivals on average stay length, with visitors averaging 10.7 days (vs Spain 5.3), while spending per visitor rose 3.7%. Regional Trade & Routes: Transport minister Abdulkadir Uraloğlu outlined plans to modernize the Hejaz Railway and extend it toward Oman as an alternative to Hormuz, alongside corridor projects. Diplomacy for Business: Fidan will host a trilateral Türkiye-Azerbaijan-Georgia foreign ministers meeting in Istanbul focused on connectivity, energy security and commercial ties. Global Risk From Hormuz: US strikes downed more Iranian drones over Hormuz, keeping shipping and energy uncertainty front and center for the region’s economies.

Turkey-Bangladesh Defence Talks: Turkish FM Hakan Fidan met Bangladesh PM Tarique Rahman in Dhaka, calling it a first step toward upgrading ties to a “strategic” level, with plans for annual foreign-minister consultations and annual 2+2 talks (foreign and defence ministers), plus a joint committee mechanism covering trade, investment, Rohingya, climate and regional issues. Black Sea Shipping Risk: A Turkish-flagged trawler was sunk after an apparent attack near Sevastopol, killing one crew member and injuring four, underscoring rising dangers for civilian shipping amid the Russia-Ukraine conflict. Controversy at Koç Holding: Turkish justice authorities opened an investigation into billionaire Rahmi Koç after a hospital-opening “joke” went viral for remarks targeting a Kurdish woman, with officials saying wealth doesn’t exempt anyone from dignity and equality rules. Airline Expansion Watch: Turkish Airlines says it aims to launch nonstop Istanbul–Sydney in 2027 using Airbus A350-1000ULR aircraft, though the business case faces challenges after Qantas delayed its Sunrise ultra-long-haul rollout. World Cup Visa Processing: The US Embassy in Ankara praised staff for processing visas for Iran’s national football team ahead of the 2026 tournament, as visa delays remain a key concern for Iran.

US-Turkey Visa Processing: US Ambassador Tom Barrack praised the U.S. Embassy in Ankara for processing visas for Iran’s national football team ahead of the World Cup, after reports said entry permits were granted about 10 days before the Los Angeles opener. Iraq Security: Iran-backed Iraqi Shi’ite militias announced steps to disarm and hand weapons to state control, with Western officials welcoming it as a move toward renewed Iraqi sovereignty. Bangladesh-Türkiye Defense & Politics: Ankara and Dhaka agreed to form ministerial-level joint committees to deepen defence and political cooperation, with talks also covering trade, investment, joint production and Rohingya coordination. Ukraine-Russia Spillover: Ukrainian drones again hit St. Petersburg, prompting “stay at home” warnings; Russia said many drones were shot down. Middle East Tensions: Iran launched ballistic missiles toward Bahrain and Kuwait after renewed US strikes, drawing sharp condemnation from Gulf states. Turkey-Linked Business: Türkiye’s Meta probe over AI practices and WhatsApp access is reported alongside broader platform commission rules affecting Russian and foreign sellers.

Bangladesh–Türkiye Strategic Push: Turkish FM Hakan Fidan met Bangladesh counterpart Khalilur Rahman in Dhaka, agreeing to deepen defence cooperation and expand trade and investment, with talks also covering a possible free trade arrangement and preferential trade. Rohingya Diplomacy: Both sides reaffirmed support for a safe, voluntary, dignified return of Rohingyas to Myanmar, with Turkey backing a lasting regional solution. Trade Targets: Bilateral trade was cited at $1.36bn in 2025, with both sides aiming to lift it toward $2bn. World Bank Roads Deal: The World Bank approved a $900m package for Iraq and the Kurdistan Region to upgrade key north–south and east–west road corridors linking Baghdad to the Turkish border and onward to Syria and Jordan. Turkey in Global Finance/Policy: Turkey is also in the spotlight as participation finance is framed as a “fairer” model, while Meta faces a Turkish antitrust probe over AI practices. Aviation/Industry Signals: Rolls-Royce reported improved fuel-burn performance from its Trent XWB-84 EP engine, with Turkish Airlines among the operators.

Inflation Watch: Türkiye’s annual inflation edged up to 32.61% in May (from 32.37% in April) as prices rose 1.71% month-on-month, with housing, utilities and energy still driving costs. Diplomacy & Energy Security: Foreign Minister Hakan Fidan backed progress in US-Iran peace talks and stressed the need for safe passage through the Strait of Hormuz for global trade and energy stability. Trade & Investment Links: In Dhaka, Fidan and Bangladesh FM Khalilur Rahman discussed the Rohingya crisis, and possible free/preferential trade arrangements, signing an MoU on cultural heritage protection while inviting Turkish business into textiles, shipbuilding and defense. Defense Exports: Türkiye’s defense and aerospace exports hit $992m in May, up 33.9% year-on-year, with the sector’s export share rising to 5.1%. Aviation Deal: Turkish Airlines cleared a major step toward buying a minority stake in Air Europa after Spain granted FDI approval; the €300m investment is expected to close in 2026. Crypto Payments: Ripple’s RLUSD stablecoin expanded to 40+ blockchain ecosystems via Wormhole, with Turkish exchange partners cited for local access.

Hejaz Railway Revival: Turkey’s Transport Minister Abdulkadir Uraloğlu says Ankara is in talks with Saudi Arabia to modernize the historic Hejaz Railway and extend it toward Oman, aiming to create an alternative route to the Strait of Hormuz and boost regional trade connectivity. Islamic Finance Push: Turkey’s finance leadership is promoting Islamic finance expansion as a growth lever, with targets tied to lifting Turkey’s position among top markets for Islamic finance assets. Trade & Economy Watch: New figures point to Turkey’s trade deficit narrowing in the first months of 2026, while unemployment and broader growth signals remain in focus for investors. Maritime Decarbonization: DNV has validated Carbon Ridge’s centrifugal onboard carbon capture system, reporting peak CO2 capture rates up to 98% from a pilot on a Turkish-built vessel at Beşiktaş Shipyard. EU Accession Momentum: The EU has agreed to formally open accession talks with Ukraine and Moldova on the first cluster of chapters, a step that could reshape regional investment and policy alignment. Diplomacy & Regional Ties: Turkish FM Hakan Fidan arrived in Dhaka for a two-day visit focused on trade, investment, security cooperation and humanitarian engagement, including support for Rohingya camps.

Disinflation Watch: Turkey’s Finance Minister Mehmet Şimşek says inflation is expected to keep falling and end the year in the mid‑20s, calling the disinflation program “firm” despite a shock-prone environment. Islamic Finance Push: Türkiye opened the 3rd Global Islamic Economy Summit in Istanbul, positioning the Istanbul Financial Centre and the Türkiye Wealth Fund’s “One‑Stop Office” as tools to attract long-term capital. Schengen Visa Crackdown: Turkey’s Trade Ministry is investigating claims that Schengen appointment slots were collected by bots and resold via intermediaries, with seven companies under review. Energy & Trade Angle: A BOTAŞ–Edison LNG cooperation memorandum is back in focus as Türkiye deepens gas links with European markets. Gold & Reserves: New ECB reporting says gold has overtaken US Treasuries as the top global reserve asset, reflecting continued central bank demand. Coastal Property Demand: Türkiye’s summer destinations saw residential prices rise 20–25% year-on-year in 2026, led by Bodrum and the Aegean. Food & Fisheries: TÜİK reports Türkiye’s fishery production rose 11.1% in 2025 to over 1 million tons, driven mainly by aquaculture. Zero Waste Week: Istanbul’s Zero Waste Festival opened June 4, aiming for around one million visitors and hundreds of circular-economy and energy-efficiency activities.

Transport & Trade Corridors: Türkiye plans to modernise the historic Hejaz Railway and extend it toward Oman as an alternative route to the Strait of Hormuz, starting with a link to Aleppo via the existing Aleppo-Damascus-Jordan network and then expanding through regional talks with Saudi authorities. Geopolitics & Sanctions: A dual U.S.-Iranian tech CEO, Jamshid Ghomi, was arrested in the U.S. over alleged decade-long smuggling of U.S. networking and encryption equipment to Iran’s military and nuclear sectors via UAE intermediaries. NATO Burden Sharing: U.S. Secretary of State Marco Rubio says an upcoming NATO summit could be the alliance’s most important, as Washington weighs force cutbacks and urges Europe to step up conventional defence. Turkey-Armenia Normalisation: Erdoğan and Armenia’s Pashinian discussed continued steps toward direct trade, including lifting an import ban and allowing cargo shipments via the Georgia rail link, while border opening remains tied to Azerbaijan’s peace conditions. Central Banking & Gold: The World Gold Council says central banks returned to net gold buying in April (+17 tonnes), led by Poland and China, after March’s net sales. Energy Costs & Inflation Risk: Erdoğan warned the U.S.-Iran crisis is raising Türkiye’s energy import bill and could intensify inflation, stressing energy supply security.

Gold Reserves Shift: An ECB report says gold has overtaken US Treasuries as the world’s top reserve asset, with gold now 27% of official reserves by end-2025 as central banks diversify amid geopolitics. Foreign Trade Push: Turkey targets $30bn in trade with France by 2030, citing a 71% rise over five years and new French investment plans worth $5bn. CHP Leadership Shake-up: Kemal Kılıçdaroğlu has unveiled a new CHP management team after a court restored him as leader, as internal rifts continue. Bosnia Appointment Race: The PIC in Sarajevo will pick a new high representative for Bosnia-Herzegovina after Christian Schmidt’s resignation, with multiple European and US-backed nominees in play. Halkbank Deadline Watch: Halkbank shares jumped as markets price in the June 10 US case review deadline tied to a sanctions compliance agreement. Armenia Normalization: Erdoğan and Pashinyan discussed advancing direct trade and normalization steps, including rail connectivity for exports/imports. Tourism Outlook: TÜRSAB expects domestic tourism to cushion any Middle East-driven slowdown, with pricing pressure likely to rise and demand turning more last-minute. Turkey Exports: Turkish tire exports hit a record $1.9bn in 2025, with Europe leading destinations. Crypto Payments: Standard Chartered/Zodia says lira-pegged stablecoins are the second-most-used after dollar tokens, mainly for faster settlement. Regional Risk: Iran strikes Kuwait’s airport while the US hits near the Strait of Hormuz, disrupting flights and lifting oil prices. Business Fraud Alert: Authorities warn of residence permit scams using fake websites and unlicensed consultancies, urging use of the official e-Ikamet system.

Energy & Inflation: Türkiye cut gasoline and diesel prices from midnight Tuesday, citing softer global oil prices amid expectations of possible US-Iran talks; the move comes as inflation stays above 32% and the central bank has raised its year-end forecast due to geopolitical risks. Regional Trade & Logistics: The upgraded Baku–Tbilisi–Kars railway entered full operation after Georgia’s modernization, boosting annual freight capacity from 1m to 5m tonnes and strengthening the Middle Corridor linking Asia and Europe via Türkiye. Diplomacy (Türkiye–Armenia): President Erdoğan and Armenian PM Nikol Pashinyan discussed the ongoing normalization process, including steps toward direct trade, in a phone call ahead of further regional engagement. Defense & NATO: NATO Parliamentary Assembly backed stronger deterrence ahead of the Ankara summit, urging parliaments to help deliver the 5% GDP defence pledge. Business & Finance (Crypto): Ripple USD (RLUSD) is now available to Turkish institutions via partnerships with BiLira, Bitexen and Bitlo, as the firm targets Türkiye’s large crypto market. Sports (Transfer): Irish striker Sinclair Armstrong is set to join Turkish club Goztepe from Bristol City for €2.5m.

Energy & Mining Diplomacy: Egypt and Türkiye are looking to deepen cooperation in petroleum, natural gas and mining, with talks led by Egypt’s Karim Badawi and Türkiye’s Alparslan Bayraktar on expanding investment and technical know-how, including OZ Mining’s gold feasibility work in Egypt’s Eastern Desert. Gas Infrastructure: TurkStream will suspend gas transmission through both offshore lines from June 2-7 for planned maintenance and diagnostics at the Kıyıköy receiving terminal. Construction Outlook: Türkiye’s construction sector may shift to more moderate growth, as activity cools amid tighter financing and higher borrowing costs, though earthquake reconstruction and public works still provide support. Manufacturing Signals: S&P Global data points to near-stabilisation in Turkish manufacturing, with May PMI at 49.8 and output/export orders improving after April’s slowdown. Textile Tech Showcase: Shima Seiki will bring WHOLEGARMENT and cutting/knitting innovations to ITM 2026 in Istanbul (June 9-13), highlighting productivity and waste reduction for manufacturers. Crypto & Payments: Ripple says its RLUSD USD-backed stablecoin is now available in Türkiye via BiLira, Bitexen and Bitlo, aiming to compete with USDT/USDC in a market driven by inflation-linked demand. Economy Snapshot: Türkiye’s Q1 2026 GDP grew 2.5% year-on-year, extending expansion for a 24th consecutive quarter. Regional Connectivity: The Baku-Tbilisi-Kars railway line is set to officially enter service on June 2, boosting freight capacity and Europe-Asia transit options.

Turkey-Armenia Trade Thaw: Turkey lifted some customs limits and the Akhalkalaki-Kars rail link is now open for Armenian imports and exports, with both sides also moving on the Ani Bridge restoration—though Russian pressure may cap how far rapprochement goes. Visa & Mobility: Türkiye opened a new SEFA visa application centre in Lagos to make Schengen and other visa services easier for Nigerians in the region. Energy & Regional Power: Turkey’s energy minister said an Azerbaijan-Georgia-Türkiye-Bulgaria electricity interconnection could eventually extend toward Central Asia, boosting regional power trade. Defense Industry: Turkey’s HAVA SOJ airborne electronic warfare jammer appears in new imagery, signaling progress toward operational status. Economy Watch: Turkey’s Q1 GDP growth was reported at 2.5% y/y, while manufacturing PMI edged up toward stabilization. Labor & Courts: A report highlights how corporate power and the judiciary intersect in disputes involving unpaid mining workers and broader pressure on rights. Crypto & Finance: Turkey leads MENA crypto activity with about $200bn in transactions over the past year, as Istanbul Blockchain Week approaches. Global Risk: Iran says it will halt mediator talks and warns on Strait of Hormuz/Bab el-Mandeb, keeping shipping and oil markets jittery.

Manufacturing Pulse: Turkey’s manufacturing PMI rose to 49.8 in May from 45.7 in April, the highest since March 2024, as export orders returned to growth for the first time in 21 months—though input costs stayed high and supplier delivery times lengthened. Macroeconomy: Turkey’s economy expanded 2.5% year-on-year in Q1, with growth slowing but still positive amid tighter monetary conditions and the Iran-war shock. Policy Watch: A new UAV regulatory framework is set to bring a centralized drone tracking system and risk-based categories, aiming to tighten safety and security as drone use grows. Tourism & Environment: Nighttime restrictions on several Mediterranean beaches will run through end-September to protect endangered sea turtles, with steep fines for violations. Trade & Industry: The carpet sector is targeting $3.5bn in exports for 2026 after $871.7m in Jan-April, with Middle East wars still disrupting logistics. Business Expansion: OZ Mining signed an Egypt deal to explore gold in the eastern desert, as Cairo seeks more mining investment. Governance: Izmir’s Buca mayor and former mayor were detained in an anti-corruption operation involving municipal resources and alleged irregularities. Aviation Demand: Sabiha Gökçen hit an all-time daily record during Eid al-Adha with 894 takeoffs/landings, reflecting strong holiday travel demand.

Sanctions & Syria Economy: Syrian President Ahmed al-Sharaa held a call with U.S. President Donald Trump, urging the lifting of remaining U.S. sanctions as a key step to revive Syria’s economy and attract investment, while both sides stressed diplomacy to prevent escalation. U.S.-Turkey Regional Role: Trump expanded the mandate of Tom Barrack, keeping him as U.S. ambassador to Türkiye while naming him Special Envoy to Syria and Iraq, as Washington pushes deeper strategic cooperation with both governments. Euphrates Flood Fallout: In eastern Syria, Euphrates flooding is receding after discharges linked to Turkey’s Ataturk Dam; authorities say water levels are dropping, but the disaster left deaths, damaged farms and displaced families. Markets & FX Positioning: Bank of America analysts recommended shorting the 2-month USD/TRY forward amid Turkey’s political turbulence, citing a repricing of risk and carry of about 3.3% per month, while flagging oil, USD strength and capital outflows. Defense Industry: Katmerciler delivered upgraded HIZIR 4x4 mine-resistant vehicles to the Turkish Armed Forces with domestically integrated systems, with remaining deliveries targeted by year-end. Maritime Safety Tech: Türkiye’s BLUEVISION digital system is highlighted as improving maritime traffic safety, reflecting growing domestic tech use in strategic sectors. Tourism & Travel Demand: Amid DIY booking overwhelm and airline chaos, more travelers are turning back to travel advisers for planning help and better deals. EU Energy Sanctions: The EU is weighing a temporary freeze on Russia’s oil price cap to avoid an automatic rise, as Middle East tensions keep energy markets volatile. Public Safety Tragedy: A bus crash in Denizli killed at least eight and injured dozens, prompting international condolences including from Uzbekistan.

Trade & Industry: Turkey’s imports climbed to $829M in April (up from $659M in March), with Germany the top export market at $2.113B, followed by the US ($1.59B) and the UK ($1.453B), while manufactured goods and agriculture dominated exports. Maritime Tech: Havelsan’s BLUEVISION AI system is being positioned to make seas safer by fusing camera and AIS data to spot small boats, buoys and people in the water in real time. Energy & Cyprus: Turkey is mulling a 97-km gas pipeline linking its south coast to Northern Cyprus, aiming for engineering studies this year and a 2028 delivery, alongside a subsea electricity line. Black Sea Risk: Ankara warned of “uncontrolled escalation” after a drone attack hit a Turkish-owned cargo vessel, injuring two crew members. Politics & Business Climate: Reuters reports ousted CHP leader Özgür Özel drew thousands in Ankara after a court annulled the party congress, a move that could reshape Turkey’s opposition landscape ahead of possible snap elections. Tourism & Safety: A tourist boat sank off Marmaris with 110 aboard; all passengers were evacuated safely.