JPMorgan sees downside risks to Turkey's 3% growth forecast from fund crisis

October 3, 2026 at 05:16 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

JPMorgan analysts said the Turkish investment fund crisis poses significant downside risks to their 3% GDP growth forecast for 2026. The crisis, triggered by the liquidation of 131 funds affecting about half a million investors, also drove Borsa Istanbul's main index to its worst monthly performance since 2008 in September.

Key Facts

JPMorgan analysts said the fund crisis poses significant downside risks to their 3% GDP growth forecast for Turkey in 2026.
The crisis began with the liquidation of 131 funds and affected about half a million investors.
Borsa Istanbul's main index recorded its worst monthly performance since 2008 in September.
Turkey's Capital Markets Board (SPK) said liquidation of the affected funds could take up to six months.
Total assets of funds under liquidation exceed $20 billion, but Reuters said that does not mean investors lost $20 billion.

JPMorgan Warning

JPMorgan analysts said the turmoil in Turkey's investment fund sector could have broader consequences for the economy. They said the crisis poses significant downside risks to the bank's 3% GDP growth forecast for Turkey in 2026. The warning came in a Reuters analysis published on October 2, 2026, examining how the fund bubble burst and the investigation's scope.

Liquidation Process

Turkey's Capital Markets Board (SPK) said liquidation of the affected funds could take up to six months. Investors with net investments below 1 million Turkish lira in certain funds are expected to receive full repayment, while those with 1 million lira or more would get an initial interim payment of 1 million lira. The Savings Deposit Insurance Fund (TMSF) opened accounts for those who voluntarily want to return amounts earned from fund sales before liquidation, which officials called excessive gains. Borsa Istanbul's main index closed Thursday up 2.5% after changes took effect removing some crisis-affected stocks from indices.

Actual Investor Losses

Reuters said the total loss to investors is not yet known. Total assets of funds under liquidation exceed $20 billion, but that does not mean investors lost $20 billion. The key factor determining actual losses will be the prices at which the funds' assets can be converted to cash. A significant portion of the funds hold low-liquidity stocks, which is seen as a major factor that could complicate the liquidation process.