The Turkish Central Bank on Feb. 12 forecast that the country’s year-end inflation would be in the 15 percent-21 percent range.
The bank's interim inflation targets were maintained at 16 percent and 9 percent for 2026 and 2027, respectively, Governor Fatih Karan told a press conference in Istanbul.
"We set our interim target for 2028 at 8 percent," he said.
The bank targets inflation to fall to 8 percent in 2028 and stabilize at 5 percent in the medium term.
"We have always reiterated that during the disinflation process, we will maintain our tight monetary policy stance to achieve our interim targets," Karan noted.
He added that the cautious tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate and expectation channels.
Türkiye's annual inflation rate in January eased to 30.65 percent, its fourth consecutive monthly decline, and its lowest level since November 2021.
In its previous inflation report, the bank projected that inflation at the end of 2026 would be in the 13 percent-19 percent range.
Presenting the bank’s first Inflation Report for 2026 in Istanbul, Karahan said on Feb. 12 that for the end of 2027, their forecast indicates that inflation will decline to a range of 6 percent to 12 percent.
Tight monetary policy gradually yielded results in 2025, he stressed.
“We find it particularly meaningful that, in the background of inflation figures, the inertia persisting for a long time in certain services items, such as rent, is showing signs of easing in this period. This development will be one of the key factors in the upcoming course of the disinflation process,” Karahan said.
Under various scenarios, year-end rent inflation is projected to be between 30 percent and 36 percent, according to Karahan.
“Bond rates fell across all maturities with the improving inflation outlook and increased investor interest. We expect this performance in the bond market to continue in the coming period in line with the disinflation process,” he said.
“Starting from January, we see that capital flows into Türkiye have strengthened compared to other emerging economies. We believe the favorable course in risk indicators will continue as inflation falls and inflation uncertainties decline,” Karahan added.
