Goldman Sachs Raises Turkey's 2026 Inflation Expectation to 29 Percent
Goldman Sachs updated Turkey's year-end inflation forecast while also sharing investment trends in global markets.
International financial institution Goldman Sachs has raised its 2026 year-end inflation expectation for the Turkish economy from 27.5 percent to 29 percent. Drawing attention to risks surrounding energy prices and the depreciation of the Turkish lira, the report emphasized that tight monetary policy may remain in place for a long time.
Inflation Forecast and Tight Policy
Goldman Sachs raised its 2026 year-end inflation expectation for Turkey from 27.5 percent to 29 percent. The institution stated that energy prices and the depreciation of the Turkish lira pose upward risks to the inflation outlook.
Although a certain improvement has been observed in core inflation indicators, it was noted that monetary policy may need to remain tight for an extended period due to energy uncertainties and foreign exchange rate movements.
Turkish Lira and External Balance
The institution projected that the depreciation of the Turkish lira could accelerate in order to support the external balance. It was estimated that the lira could lose value against the dollar in the mid-20 percent range on an annual basis.
While pointing out the importance of tight policy to prevent potential adjustments in the exchange rate from increasing dollarization pressure, it was reported that the current account deficit could reach 3.5 percent of the national income.
Global Stock Markets
Goldman Sachs's report noted that the rise in global stock markets has spread to a broader group of investors. Japan, Asia-Pacific, and emerging markets delivered strong returns.
It was stated that returns in the markets are fueled not only by valuation increases but also by corporate profit growth, and that high public debt could affect capital costs.
Technology Sector and Investments
It was reported that artificial intelligence investments by large technology companies are creating pressure on free cash flows. Companies are turning towards borrowing and raising more resources from capital markets.
It was emphasized that artificial intelligence and government spending have triggered a new investment cycle in the global economy, contributing to the growth of traditional sectors such as industry and energy.