Turkey's central bank raises 2026 inflation forecast to 28% in third report
This digest was compiled by AI from multiple sources — links to the originals are below.
The Central Bank of the Republic of Turkey raised its 2026 year-end inflation forecast to 28% from 24% in the third Inflation Report of the year, presented by Governor Fatih Karahan on Aug. 13. The bank kept its 2027 forecast at 15% and its 2028 interim target at 9%, while signalling it would maintain a tight monetary policy stance.
Inflation Forecast Revisions
The bank’s third Inflation Report raised the 2026 year-end forecast to 28%, up 4 percentage points from the 24% set in May. The 2027 forecast was left at 15%, and the 2028 interim target at 9%, unchanged from the second report. In February, the bank had projected 16% for 2026 before revising the figure upward in May, citing macroeconomic risks and pricing rigidity. Governor Fatih Karahan presented the report, which included assessments of the macroeconomic outlook.
Monetary Policy Stance
The central bank indicated it would maintain a tight monetary policy stance within a realistic framework for fighting inflation, according to the primary report. The presentation covered the macroeconomic outlook and the bank’s policy stance. No change to the policy rate was announced at the presentation. In the second report, Karahan said the bank had paused communication of a forecast range for end-2026.
What's Next
The central bank’s next monetary policy meeting will show whether policymakers view the 28% path as consistent with their tight stance. It remains unclear how long the bank can hold its current policy if inflation expectations continue to drift upward.
3 sources
Turkey's central bank raises 2026 inflation forecast to 28% in third report
