The first driver is currency policy. The Central Bank of the Republic of Türkiye (CBRT) has maintained a relatively strong lira to curb inflation. While this supports domestic price stability, it also makes Turkish exports less competitive in overseas markets. The impact is most visible in Europe, where buyers paying in euros face higher sourcing costs for Turkish products.
The second driver is labour costs. Turkiye raised its monthly minimum wage by ** per cent to approximately $*** net from January ****, according to the Turkish Ministry of Labour and Social Security. Bangladesh**;s garment-sector minimum wage remains around $*** per month. Turkiye can no longer compete primarily on labour costs.
The third driver is financing costs. The CBRT policy rate stands at ** per cent following its June **** decision, while energy prices remain elevated. Together, these factors continue to compress manufacturers**; margins, particularly on high-volume, price-sensitive orders.
