Turkey raises 2026 inflation forecast to 24%

The Central Bank of Turkey has revised its inflation forecast upward amid ongoing geopolitical tensions and rising global commodity and energy prices. The new target inflation rate for 2026 has been raised to 24%, announced the head of the regulator, Fatih Karahan, during the presentation of the year's second inflation report.

According to the updated forecast, inflation could reach 26% by the end of 2026, decrease to 15% in 2027, and drop to 9% by 2028. Meanwhile, the Central Bank's long-term goal remains at 5%.

The regulator noted that short-term inflationary pressures have intensified due to the conflict in the Middle East and rising energy prices. According to Karahan, the consequences of geopolitical instability will continue to impact the Turkish economy in the coming months.

Despite this, the Central Bank intends to maintain a tight monetary policy. Authorities believe that a cautious approach and control over domestic demand will help gradually slow down inflation.

The report also mentions a likely slowdown of the global economy in 2026, which could weaken external demand for Turkish exports. Simultaneously, a decline in consumer activity and retail sales is being recorded in Turkey.

However, the Central Bank emphasized that inflation is still gradually decreasing compared to the peak values of 2024. The slowdown in price growth is particularly noticeable in the services sector and for some basic commodities. Stabilization of the food market and a decrease in vegetable prices in the coming months are expected to put additional downward pressure on inflation.