Turkey raises inflation forecast to 28.4% - War in Middle East weighs on economy
Turkey has revised its inflation forecast for the end of 2026 significantly upwards, bringing it to 28.4%, from 16% which was the previous forecast.
The news was announced by the Turkish Vice President during the presentation of the medium-term economic program for the period 2027-2029.
According to him, inflation is expected to start falling again in the fourth quarter of 2026 and reach 28.4% by the end of the year.
According to the new program, the Turkish government expects inflation to continue to decline in the coming years, falling to 21% in 2027, 13.5% in 2028 and 9% in 2029.
However, the conflict in the Middle East has worsened the economic outlook. The Central Bank of Turkey estimates that the direct and indirect effects of the war may have added about 7 percentage points to inflationary pressures.
Official data show that annual inflation in Turkey decreased slightly to 31.51% in August, from 31.75% in July.
Inflation in the country has remained above 30% since December 2021 and peaked at 75.5% in May 2024, before embarking on a downward trajectory.
The fight against inflation remains the main priority of the government's economic policy and the country has made considerable progress in this regard.
However, the strong upward revision of the forecast for 2026 indicates that Turkey still faces significant inflationary pressures, while geopolitical developments in the Middle East increase uncertainty for the economy.
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