Central Bank Governor's Inflation Forecast and War Impact Statement

Central Bank of the Republic of Turkey Governor Fatih Karahan announced that the year-end 2026 inflation forecast has been updated to 28.4 percent within the framework of the new Medium-Term Program. It was stated that the revision stemmed from realized inflation and the impact of the war, which approaches 7 percentage points.

New Medium-Term Program Revision

Central Bank of the Republic of Turkey Governor Fatih Karahan announced that the year-end 2026 inflation forecast has been raised to 28.4 percent in the new Medium-Term Program. Within the scope of the program, it was stated that inflation is targeted to decline gradually in the coming years.

Process of Determining Targets

Touching upon the relationship between the Central Bank's targets and the program targets, Karahan emphasized that these figures were formulated together in coordination and harmony among institutions.

Reasons for Inflation Deviation

It was explained that part of the change in the forecast stems from realized inflation remaining above the target, and that this situation also affects future years.

Impact of the War on Inflation

The impact of the war experienced this year on inflation was calculated to be close to 7 percentage points. It was stated that this impact reflected on transportation, food, and agricultural inputs through energy costs.

Core Goods and Services Sector

While it was noted that lower inflation was observed in core goods despite cost increases and that this is consistent with demand balancing, it was recorded that rigidities persist in the services sector.