Turkey Raises Year-End Inflation Forecast to 28.4%

Vice President Cevdet Yilmaz unveiled Turkey's medium-term economic programme covering 2027 through 2029 on Sunday. The official forecast raised the year-end inflation rate to 28.4%, a significant increase from the previous projection of 16% made in the 2026-2028 plan. Yilmaz stated that inflation will begin declining in the fourth quarter of 2026 and is expected to fall to 21% in 2027, 13.5% in 2028, and 9% in 2029. He attributed the upward revision largely to the ongoing war in the Middle East, noting that direct and indirect effects on prices have been estimated at approximately seven percentage points. Official August data showed the annual inflation rate eased slightly to 31.51% from 31.75% recorded in July. This annual rate has remained above 30% since December 2021, having previously peaked at more than 75% in May 2024 and specifically hitting 75.5% in that month. Yilmaz emphasized the government's progress in controlling prices, describing the high inflation as the top priority of the new economic strategy.