Türkiye’s disinflation program has shown success, while the current policy mix “continues to balance disinflation with steady growth,” the International Monetary Fund (IMF) has stated.
The IMF Executive Board completed the 2025 Article IV consultation with Türkiye, it said in a statement.
“Since the 2024 Article IV, Türkiye’s disinflation program has shown successes,” the fund said. “Inflation fell from 49.4 percent (y/y) in September 2024 to 30.9 percent in December 2025 on the back of strong fiscal consolidation, prudent income policies and a tight monetary policy stance.”
“Turkish Lira demand has strengthened, bolstering international reserves and the current account deficit remains adequately financed,” it added.
“Tight monetary policy, moderate wage growth and broadly neutral fiscal policy are expected to support gradual disinflation,” it said, emphasizing that the current policy mix continues to balance disinflation with steady growth.
The statement said end-2026 inflation is expected at 23 percent, as domestic demand remains strong and boosted by further policy rate cuts and rising confidence, growth is expected at 4.2 percent for 2026.
While growth should remain solid and inflation will fall, the IMF said the approach bears risks and costs, noting that external risks remain elevated due to persistent global trade uncertainty and regional conflicts.
“The materialization of an adverse shock, like an increase of energy prices or a negative weather event, could further extend the period of still-high inflation. Moreover, the gradual approach to disinflation has weighed on the financial sector and slowed productivity growth,” the statement said.
According to IMF projections, Türkiye’s economy is expected to grow 4.1 percent in 2027 and 4 percent annually between 2028 and 2031.
The unemployment rate is forecast at 8.3 percent in 2026, 8.7 percent in 2027 and 9.1 percent during 2028-2031.
Inflation is projected to fall to 19 percent next year and then ease to 15 percent through 2031. The current account deficit is expected to equal 1.4 percent of GDP in 2026-2028 and 1.5 percent in 2029-2031.
