Turkey raises 2026 inflation forecast to 28.4%

Turkey has raised its year-end 2026 inflation forecast to 28.4%, Vice President Cevdet Yilmaz said on Sunday as he unveiled the country’s medium-term economic programme for 2027-2029.

Yilmaz said the government expected inflation to begin falling again in the fourth quarter of 2026 and reach 28.4% by the end of the year. Last year’s medium-term programme had forecast year-end inflation at 16%.

Under the new programme, inflation is projected to fall to 21% in 2027, 13.5% in 2028 and 9% in 2029.

Official data put Turkey’s annual inflation rate at 31.51% in August, down from 31.75% in July. Annual inflation has been above 30% since December 2021 and peaked at more than 75% in May 2024 before slowing.

Yilmaz said the war in the Middle East was a key factor in the upward revision. He said Turkey’s central bank estimated the direct and indirect effects of the war on inflation at about seven percentage points.

Yilmaz said fighting inflation remained the top priority of the government’s economic programme.