Turkey Raises Year-End Inflation Forecast to 28.4% Due to Iran Conflict
Turkish officials revised the inflation outlook for the end of 2026 to 28.4%, citing direct and indirect impacts from the ongoing conflict with Iran on energy and commodity prices.
Turkish authorities increased their official inflation forecast for the end of the current year to 28.4%. Vice President Gultum Yilmaz stated that combating inflation has taken longer than expected due to the war's consequences. The government attributes approximately seven percentage points of the inflation rate to the direct and indirect effects of the conflict with Iran on energy and commodity prices, according to the Central Bank of Turkey. Officials maintain a path to return inflation to single digits by 2029 while accelerating economic growth to 5%. Yilmaz predicted that inflation would begin declining again in the fourth quarter of 2026 before reaching 28.4% by year-end. The forecasted rates are expected to fall to 21% in 2027, 13.5% in 2028, and 9% in 2029. These revised projections represent a significant increase compared to the government's previous targets for the medium-term period spanning 2027 to 2029.
