The global economy is going through one of its most complex periods in recent years. Geopolitical tensions on one side, trade wars, energy security debates, and a high-interest-rate environment on the other… While even the world’s largest economies are issuing cautious notes on growth, industrial production is visibly facing a significant downturn.

The recently announced ISO Türkiye PMI data clearly reflects the reality faced by industrialists. In April, the PMI was recorded at 45.7. This figure marks the lowest level in the past three years. The fact that the PMI index has hovered below the 50-threshold for an extended period indicates that the slowdown in production persists, and pressure on orders and capacity utilization continues. In particular, the high cost of accessing finance, the suppression of foreign exchange rates, the contraction in the domestic market, and the fragility of global demand pose a heavy burden on the real sector.

The Turkish economy is currently implementing a significant disinflation program. While the tight stance in monetary policy plays a critical role in combating inflation, the currently paused controlled interest rate cuts are being closely monitored by the real sector. The business community, unsettled by the war, expects a rapid resolution to hostilities so that financing costs can return to predictable and manageable levels. This is because the sustainability of a production economy requires not only price stability but also a fortified investment climate.

From the industrial sector’s perspective, the most critical need today is predictability. When making investments, an industrialist cannot calculate based solely on today; they must project 5 to 10 years ahead. An economic framework that instills confidence across every single indicator—from energy costs to exchange rate stability, and from access to finance to export markets—carries immense weight. Industrialists, already hard-pressed in this regard, have understandably chosen a wait-and-see approach by postponing their investment projects due to the negative impacts of the war.

In light of all these developments, I also want to touch upon the steps taken to increase our country’s economic resilience. The new tax and incentive package under the “Türkiye Century: Strong Hub for Investment Program,” announced recently by our President, is a strategic and accurate move in this context.

The corporate tax reductions forming the backbone of this package represent a powerful investment in our production- and export-oriented growth model. Specifically, reducing the corporate tax rate to 9% for manufacturing exporters and to 14% for other exporting institutions will significantly bolster our competitiveness. This regulation will pave the way for our companies to play a more active role in global markets and scale up their foreign currency-generating activities.

It seems certain that the war will inflict two major negative impacts globally and domestically: growth will slow down, and inflation will rise. A slowdown in growth clearly equates to a decline and regression in production. Particularly, the elevated level of inflation in our country and its tendency to climb even higher implies that costs will rise unabated. It appears that the surge in energy prices will also persist. Experts emphasize that even if a peace agreement is signed and the Strait of Hormuz is reopened, it will take until the final months of the year for oil prices to revert to their previous state.

Meanwhile, the foreign exchange dilemma faced by manufacturing exporters remains completely unresolved. Due to the suppression of exchange rates, products manufactured under very high costs are being exported with almost zero profit margins just to retain market share, which diminishes the utility of the resulting foreign currency revenue.

Today, Türkiye’s greatest and most urgent need is a long-term economic vision that places production at its very core.

Short-term fluctuations will undoubtedly occur. However, history has shown us that nations that produce survive, and nations that protect their industries grow stronger. Türkiye’s future lies in production, exports, and technological transformation.

As industrialists, we believe in our country’s potential. When Türkiye’s inherent entrepreneurial spirit, production culture, and young human resource are coupled with the right policies, a much stronger economic narrative can be written.

Because we know that a strong industry means a strong Türkiye.

I wish all my fellow industrialists peaceful, happy, wonderful, healthy, and highly productive days ahead.

Eyüp SÖZDİNLER

Chairman of the Board 

Çerkezköy Organized Industrial Zone (COIZ)