Turkey's central bank raises 2026 inflation forecast to 29.5 percent

Turkey's central bank raised its year-end inflation forecast for 2026 from 28 percent to 29.5 percent, an increase of 1.5 percentage points.

Central Bank Governor Fatih Karahan announced the updated forecast during the presentation of the bank's year-end Inflation Report at an information session held at the bank's Istanbul Financial Center campus.

“We have updated our year-end 2026 inflation forecast upward to 29.5 percent.”

Karahan said inflation is projected to decline to 21 percent by the end of 2027, to 13.5 percent by the end of 2028, and to 9 percent by the end of 2029, before stabilizing at the medium-term target of 5 percent.

The governor cited the ongoing course of the war, expectations that energy prices will remain elevated longer than in the previous reporting period, and updates to food inflation assumptions as factors pushing the forecast upward.

Karahan also noted that oil price assumptions for 2026 and 2027 were revised upward, as were natural gas and import price assumptions, due to pressures from energy supply disruptions, rising refinery margins, and increasing transportation costs.

The bank stated that financial conditions remain tight enough to support disinflation throughout the forecast horizon, while uncertainty surrounding the economic outlook remains high due to geopolitical developments and volatility in financial and commodity markets.