Turkey lifts year-end inflation forecast to 28.4%

Turkey has revised its year-end inflation forecast upward to 28.4%, according to Vice-President Cevdet Yilmaz's unveiling of the country's medium-term economic programme for 2027-2029. The rate of inflation eased to 31.51% in August from 31.75% in July, as reported by official data.

In a televised address, Yilmaz indicated that the forecasted decline in inflation is expected to commence in the fourth quarter of 2026, reaching 28.4% by the end of 2026. This projection marks a substantial increase from the previous 16% forecast in the 2026-2028 medium-term programme.

Several factors are contributing to the upward revision of Turkey's inflation outlook, with the conflict in the Middle East playing a significant role. According to Yilmaz, the war's direct and indirect effects have been estimated to have impacted inflation by approximately seven percentage points.

Turkey's annual inflation rate has been persistently above 30% since December 2021, peaking at over 75% in May 2024. However, the rate has begun to observe a downward trend following the implementation of government policies aimed at combatting inflation. Yilmaz emphasized that eradicating inflation remains the top priority of the Turkish economic programme.