Turkey’s government on Monday forecast inflation would fall to 28.5 percent this year and to 16 percent in 2026 before dropping to single digits in 2027, a year later than previously projected, Reuters reported.
The targets were included in the annual medium-term economic program, which also sees growth slowing to 3.3 percent in 2025 as tight monetary policy weighs, before rebounding to around 5 percent in 2028.
Vice President Cevdet Yılmaz, presenting the plan in Ankara, said disinflation would continue through year’s end, supported by fiscal measures and stable commodity prices. He added that while authorities intervene to smooth “extreme” swings in the exchange rate, Turkey maintains a floating currency regime with no lira target.
The lira weakened to 41.27 per dollar on Monday, heading for another record low close. Annual inflation was nearly 33 percent in August, above expectations, while second-quarter GDP growth also surprised on the upside. Analysts expect the central bank to slow its rate cuts this week.
The new forecast marked a retreat from last year’s program, which predicted single-digit consumer price inflation by 2026.
Turkey is emerging from a yearslong crisis of soaring prices and a plunging currency, fueled by low interest rates championed by President Recep Tayyip Erdoğan. Since mid-2023, a new cabinet and central bank leadership have reversed course, raising the policy rate to 50 percent before beginning an easing cycle in July.
Finance Minister Mehmet Şimşek, also speaking at the presentation, said there had been no “extraordinary” market moves following last week’s court ruling that ousted the Istanbul provincial head of the main opposition party, an event that rattled financial markets.
The program forecasts growth of 3.3 percent in 2025, 3.8 percent in 2026 and 5 percent in 2028. It also projects tourism revenue rising from $64 billion this year to $75 billion by 2028, and exports climbing from $273.8 billion to $308.5 billion over the same period.
Unemployment is expected to hold at 8.5 percent this year and next, while the current account deficit is forecast to narrow from $22.6 billion in 2025 to $18.5 billion in 2028.