How the Iran Conflict Is Reshaping Turkey’s Economy and Geopolitics

In this paper, we discuss:

• How the Middle East conflict is pressuring Turkey’s domestic economy by driving up inflation, straining the national budget, and widening its current account deficit;
• Why Turkey’s rapidly expanding defence industry is boosting its strategic influence and bringing in record export deals;
• How European nations are reassessing Turkey’s role, increasingly viewing Ankara as an indispensable NATO partner for regional security;
• Why trade disruptions around the Strait of Hormuz are drawing fresh global attention to alternative overland routes like the Middle Corridor;
• How Turkey is positioned to balance short-term economic shocks while securing long-term advantages as a critical logistics and energy hub.

Download PDF: Turkey – July 2026