Milli Re 2025 Annual Report

During 2025, the Turkish economy exhibited a moderate growth performance despite inflationary pressures, and the national economy grew by 3.6% in the reporting period. In its World Economic Outlook released in January 2026, the IMF projected 3.3% and 3.2% growth for the global economy in 2026 and 2027, respectively, following a 3.3% rate of growth in 2025. This ratio remains below 3.7%, which is the mean of the rates achieved in the 2000-2019 period. The report estimates that advanced economies grew 1.7% in 2025, whereas developing economies grew by 4.4%. Projecting 1.8% and 1.7% growth for developed economies in 2026 and 2027 respectively, the growth rate of developing economies is expected to go slightly above 4%. The IMF presumes that re-escalation of trade tensions in the coming period may increase uncertainty and repress economic activity, and cites domestic political tensions, geopolitical crises, high budget deficits, and the pressure that increased public debt creates on long-term interest rates as other important risk headings. In addition, geopolitical frictions and heightened regional risks intensified by recent developments involving Iran are among the factors casting a shadow of uncertainty over the global economic outlook. The Turkish economy remains on growth track During 2025, the Turkish economy exhibited a moderate growth performance despite inflationary pressures, and the national economy grew by 3.6% in the reporting period. Throughout the year, consumption and investments have been the main contributors to growth. In terms of manufacturing; industry, construction, and services sectors supported growth, while the agricultural sector contracted. From the standpoint of inflation, the disinflation process continued throughout 2025. Following the price increases that peaked by mid-2024, annual CPI declined to 30.9% at year-end 2025, achieving a marked improvement. While the tight stance was maintained in the monetary policy, the Central Bank of the Republic of Türkiye (CBRT) made gradual adjustments to interest rates depending on the decrease in inflation, and the policy rate went down to 38% as of year-end. As the budget performance was shaped by endeavors to secure fiscal discipline, the central government’s budget deficit declined from TL 2.1 trillion in 2024 to TL 1.8 trillion in 2025 due to increased tax revenues coupled with the limited rise in primary expenditures. In 2025, as reserves continued to strengthen, the course of the current account deficit at sustainable levels and the improved country risk premium reduced the need for external financing while continuing to lower external financing costs. However, current surplus excluding gold and energy, which supported these developments, slumped by an annual 19.5% to USD 42.1 billion and created a relatively negative outlook for the coming period. On another note, the expectation that the Middle East chaos exacerbated with the attacks on Iran by early 2026 will trigger a surge in gold demand and energy prices will put significant pressure on the current deficit. GENERAL INFORMATION FINANCIAL RIGHTS PROVIDED TO THE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION 13