The political economy of ISO 500 data: The real sector in a financing trap and asymmetric effects

The Turkish economy continues to feel the effects of the turbulent period it has been going through for a long time, beyond macroeconomic data, directly in the capillaries of the real sector. The "Turkey's Top 500 Industrial Enterprises" research, announced by the Istanbul Chamber of Industry (ISO) and which takes an X-ray of Turkey's industrial giants, offers a unique data set where we can read the projections of implemented economic policies on the ground, far beyond being just a ranking list.

When we examine the latest data through the lens of macroeconomic stability, sustainable growth, and a vision of structural transformation, the picture that emerges signals an asymmetric slowdown where the real sector is crushed under a heavy financing burden, rather than a "rebalancing" process.

MACROECONOMIC FRAMEWORK: The Real Sector's Test with Financing

The most striking truth that the ISO 500 results whisper to us in terms of political economy is the unsustainable gap between the industrialist's operating profit and financing expenses. According to the data, the ratio of industrial enterprises' financing expenses to operating profit has solidified in the 85-86% band. This ratio is well above historical averages (approximately 64.5%) and points to a clear threat of "capital erosion."

The conceptual equivalent of this situation is as follows: Our industrialists are transferring almost all of the operating profit they generate, sell, and earn to the banking system and financing costs. There is no resource left in the hands of businesses to invest in technology, finance R&D processes, increase capacity, or create employment. Although the high-interest environment that emerged as a side effect of tight monetary policy is a macro-prudential measure applied to curb inflation, the extension of its dosage and duration has pushed the real sector to the point of "breaking away from production" and "focusing only on rolling over debt." This picture is a serious handicap in terms of the quality and sustainability of economic growth.

PRODUCTION AND CONSUMPTION GAP: Asymmetric Slowdown

Another dangerous dimension of the process we are going through is the "asymmetric" effect of the tightening policies implemented on the economy. On one hand, the fact that Manufacturing PMI (Purchasing Managers' Index) data has remained below the 50 reference value for months, signaling a contraction, while on the other hand, retail sales volumes maintain their high course, shows that we have deviated from the simultaneous cooling predicted by classical economic theories.

The main reason for this is that the "inflation expectation" in the consumer has not yet been broken. The anxiety that prices will increase even more in the future pulls demand forward with a rational protective instinct, keeping consumption alive. However, on the other side of the coin, the industrialist is shutting down operations and lowering capacity utilization rates due to high financing costs and uncertainty.

An economy where consumption continues but production shrinks faces the risk of a "supply shock." This weakness in the production leg has the potential to reignite inflationary pressures in the medium term by restricting the supply of goods in the market. Therefore, there is an urgent need for micro-reforms that not only suppress demand but also support supply (production) and activate selective credit mechanisms in the fight against inflation.

REGIONAL DYNAMICS: ISO 500 Anatomy of Two Different Production Basins and "Blood Loss"

These structural problems and financing shocks at the macro level manifest with different characteristics on a provincial basis. The ISO 500 and ISO Second 500 performances of Adana and Tekirdağ, two important production basins of Turkey, contain critical clues to understanding both the resilience of our industry and the "blood loss" it experiences in the high-interest-low-profitability spiral.

TEKİRDAĞ BASIN: Production Giants Hidden by Statistics and Those Falling to the Second 500

Tekirdağ, the production dynamo of the Marmara Region, is in the position of a "hidden giant" when looking at ISO 500 lists on a provincial basis. If we only look at official Chamber of Commerce and Industry (TSO) records, we would encounter a misleading picture, such as 2 firms in Çerkezköy and 4 in Çorlu being in the top 500. Because the production lines and environmental pollution of giant industrial enterprises are in Thrace, while their tax plates and financial centers are in Istanbul. However, when we look at the current 2025 statements made by the Chambers based on the factories in their own fields, we see that a total of 56 giant facilities, including 30 firms from the Çorlu TSO region and 26 firms from the Çerkezköy TSO region, are in the ISO 500.

In the list announced by Çorlu TSO; it is clearly seen how national and global actors such as Coca-Cola İçecek, Sütaş, Vestel Elektronik, Modern Karton, Akçansa, Betek Boya, and Sarten Ambalaj have turned the Çorlu basin into an industrial base. A similar concentration of international capital and advanced technology exists on the Çerkezköy side as well.

However, on the other side of the coin, there are victims of the asymmetric slowdown created by tight monetary policy. Although the total volume power in the region is maintained, there is a serious "blood loss" in the lower layers of the lists. Some textile, plastic, and medium-sized industrial enterprises that were in the ISO 500 in previous years and were high employment reservoirs have fallen to the ISO Second 500 list or have been completely erased from the list due to financing costs reaching 86% and shrinking orders. Especially the contraction in export markets and the real appreciation of the currency against inflation (loss of competitiveness) have eroded the profit margins of exporting firms in the Tekirdağ basin, pushing them from the giants league to a lower league, namely the Second 500. These declines are not just a change in ranking; they are the picture of the decrease in the number of shifts in the region, the contraction of employment, and capital erosion.

RESISTANCE OF ÇUKUROVA: Replacements and Breakaways in Adana Industry

The Adana industry, rising on the fertile lands of Çukurova, has a different genetic makeup that relies more on local capital and agriculture-based industry compared to Tekirdağ. According to the current 2025 ISO 500 results, Adana has maintained its quantitative presence on the list with 16 firms.

However, when we look at the internal dynamics of the list, we see shocking replacements and the effects of the bitter prescription. Although SASA Polyester, the flagship of Adana industry, maintains its first place in the city, it has regressed from 36th to 44th place in the general Turkey ranking. While Temsa regressed from 133 to 138; on the other hand, firms such as Elita Gıda (from 242 to 229), which relies on the flexible demand of the food sector, and PierAgro Gıda (from 485 to 314) with its agriculture-based investments, have made significant upward leaps, while Kıvanç Tekstil and Aksu Piliç have newly entered the Top 500, keeping the region's production appetite fresh.

But the real story of "financing shock and blood loss" lies in the firms that fell off the list. Two important values of Adana that were in the ISO 500 in 2024; Akyem Adana Yem (355th place) and Atlasdenim Tekstil (472nd place), fell from the Top 500 in 2025 to the Second 500 league due to increasing input costs, high interest burden, and contraction in their sectors.

The fall of these two large companies based on agriculture and labor from the giants league confirms the "distribution shock" theory: In periods when access to financing becomes difficult and costs from energy to raw materials increase in shocks, SMEs and giants in traditional sectors lose their profitability while struggling to survive; their production and employment capacities are severely damaged. The Akyem and Atlasdenim example is a summary of how vulnerable real production in Turkey is left against financial foam, not just in Adana.

CONTRACTION IN EMPLOYMENT AND DISTRIBUTION SHOCK: Who Pays the Bill for the Crisis?

We see very clearly in the current ISO 500 employment data that the search for macroeconomic stability and tight monetary policies are not just about financial statements, but directly shape social welfare and income distribution. According to the data, employment in Turkey's 500 largest industrial enterprises has contracted by 2.5%. This rate means that tens of thousands of qualified industrial workers have been disconnected from the production line.

In an environment where the industrialist loses 86% of their profit to financing expenses (interest) and the production-consumption gap widens asymmetrically, this melting in employment is not a coincidence; on the contrary, it is the result of a brutal rationality. The real sector, which cannot access financing, cannot fully reflect the increasing costs to prices, and has to reduce production capacity as we see in the PMI data, has turned to "labor costs," the most easily manipulated variable, to survive. Companies have adopted a "survival without employment" strategy to cope with high indebtedness, trying to protect their profitability per unit by laying off workers.

Here, a much deeper structural problem, known in economic literature as a severe "distribution shock," emerges. While operating profits in ISO 500 data increased by 57% in nominal terms, the increase in gross wages paid to workers (approximately in the 39-42% band) remained far behind inflation and capital profitability. When read together with the 2.5% drop in the number of employees, this picture shouts to us: While the share of labor (the worker) in the total value added (the pie) produced shrinks, the share of capital and the financial sector grows.

The implemented tightening policy has not yet brought inflation down to the targeted levels, but it has started to make the bill paid by further deteriorating income distribution. The fact that the industrialist stops investment and reduces employment by being trapped in a financing trap is the most concrete evidence of stagflationary (inflation within stagnation) symptoms in the economy.

The destruction created by financing costs undermines not only balance sheets but also social welfare. The bill for the crisis and the high-interest environment is cut directly to the working class through shrinking employment capacity and wages that are melting in real terms. Every worker disconnected from the production line is not only a loss of momentum for the industry but also the clearest proof that Turkey's growth model, which is based on domestic demand, is rolled over with debt, and deepens income inequality, is clogged.

CONCLUSION AND EXPECTATIONS FOR SOLUTIONS: From Rent Economy to Production Economy

The main goal of economic policies should not be just to pull down inflation figures, but to protect production capacity, establish income distribution justice, and build a foundation for sustainable development while doing so. ISO 500 data has registered that financial ratios have deteriorated dangerously to the detriment of the real sector.

In an equation where the industrialist pays almost all of their earnings to interest, long-term investment plans cannot be made. The solution to the problem lies in deep-rooted and structural reforms rather than daily monetary policy moves:

• Predictability and Rule of Law: Improving the investment climate and permanently lowering the country's risk premium (CDS) is only possible with a transparent, rule-based, and predictable economic management.

• Selective Credit Mechanisms: While tight monetary policy is being implemented, wholesale approaches that will completely block the access of the textile manufacturer in Adana or the industrialist in Tekirdağ to working capital should be avoided; targeted financing channels that will support production based on exports, employment, and high value-added should be kept open.

• Growth Focused on Production, Not Consumption: The only way for Turkey to get rid of the chronic current account deficit and inflation spiral is to abandon the growth model based on rent and domestic consumption and transition to a production model that is technology-oriented, centers on green transformation, and saves the industrialist from the "financing trap."

It should not be forgotten that; when the production line stops, the cost of restarting it will be much heavier than the cost of lowering inflation. The data is warning; we have to listen and take structural steps.