The Central Bank of Turkey has downgraded its inflation forecast due to the crisis.
The Central Bank of Turkey has revised its inflation forecasts due to geopolitical instability and rising prices, opting not to publish forecast ranges. The new target for the end of 2026 is 24%, while expectations for the end of the current year are approaching 26%.
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The Central Bank of Turkey has significantly revised its year-end inflation forecast, opting not to publish forecast ranges due to heightened uncertainty stemming from the geopolitical situation in the Middle East. According to the regulator, current conditions make macroeconomic planning particularly challenging.
The new inflation target for the end of 2026 has been set at 24%, whereas previously a decrease in price growth to 16% was expected. Actual inflation expectations for the end of this year are approaching 26%.
As of April, annual inflation in Turkey accelerated to 32.4%, exceeding economists’ median forecast by one percentage point.
Given the ongoing geopolitical instability, the use of forecast corridors—which typically reflect possible positive and negative inflation scenarios—has been temporarily suspended.
Turkey’s economy, which is heavily dependent on energy imports, is under significant pressure due to the crisis in the Middle East. The Central Bank was forced to revise its assumptions, including worsening its food inflation forecast for the end of the year from 19% to 26.3%.