Focusing on the disinflation process and ensuring price stability alongside sustainable growth remains the top priority, Vice President Cevdet Yılmaz said on Sunday while unveiling the new road map for the Turkish economy, covering the 2027-2029 period.

"The main point is to resolutely continue the disinflation process and permanently establish price stability," Yılmaz said while presenting the new Medium-Term Program (MTP) for the 2027-2029 period.

Speaking in Ankara, Yılmaz said that the government revised its growth forecast for 2026 to 3.3% from an earlier 3.8% and that it expects inflation to end the year at 28.4%.

"We expect inflation to start declining again in the fourth quarter of 2026 and to reach 28.4% by the end of the year," he said in a televised address.

Under the new program, inflation is projected to fall to 21% in 2027, 13.5% in 2028 and 9% in 2029, the vice president also said.

Türkiye's annual inflation rate eased to 31.51% in August from 31.75% in July, according to official data.

Yılmaz said the war in the Middle East had played a key role in the upward revision of the inflation outlook.

"According to our central bank, the direct and indirect effects of the war on inflation have been estimated at approximately 7 percentage points," he said.

The vice president also said the government had made "significant progress in combating inflation," which remains the top priority of its economic program.

"Inflation, which had risen to 75.5% in May 2024, has begun to show a clear downward trend as a result of the policies we have implemented," he said.

Starting his speech, he reflected on the holistic approach and involvement of the ministries when forming the road map, which constitutes the main policy framework, as he shared key targets and forecasts for the upcoming period.

Global risks

"The global economy is going through a new period in which economic, technological and geopolitical developments have become increasingly intertwined, predictability has declined, and risks have reached historically high levels," said Yılmaz.

"The Turkish economy is, of course, not independent of developments in the world or in our region," he added.

He went on to say that the direct and indirect effects of the war in the region "are being felt across many areas, from energy and commodity prices to global trade, and from the inflation outlook to growth expectations."

In line with this, he said that the assumptions used last year had been updated in light of developments during the year, particularly due to the war in the region.

Türkiye, as an energy-importing country, has been exposed to the increase in oil and gas prices, which have risen sharply this year following the outbreak of the U.S.-Iran war.

"The global growth forecast, one of the main assumptions in the previous MTP, was revised down from 3.1% to 3%. The growth forecast for our trading partners declined from 2.4% to 1.6%, while growth in the euro area fell from 1.2% to 0.9%," he said.

Growth at 3.3% this year

Furthermore, he shared the revised figure for the Turkish economic growth this year, suggesting it is expected to come in at 3.3% before recovering next year and in the years after.

"We revised our 2026 growth forecast to 3.3%. Our industrial growth forecast was reduced to 2.3%, while our year-end inflation forecast was raised to 28.4%," Yılmaz noted.

"Due to the direct impact of higher energy prices on our external balance, our energy import forecast increased from $63 billion to $71 billion, while our forecast for the foreign trade deficit rose from $96 billion to $105 billion," he also said.

"Accordingly, we also revised our forecast for the current-account deficit as a share of GDP (gross domestic product) to 2.6%," he further said.

"Our tourism revenue forecast was also revised downward from $68 billion to $65 billion due to the effects of the war," he added.

Still, Yılmaz said that these revisions "do not represent a change in the direction or main framework of our program."

He referred to the long-term goal of price stability, which Turkish authorities have been pursuing since the middle of 2023 with the return to more conventional macroeconomic policies.

"Despite this, the Turkish economy continues to produce, grow and create employment," said the vice president.

He continued by also pointing out that expectations for 2027 point to a renewed recovery in the global outlook and consequently easier conditions for trade and stronger growth for Türkiye as well.

He also said that officials were closely monitoring the risks amid the geopolitical tensions.

"We are closely monitoring these developments and the additional risks they may create, taking measures to limit their effects and conducting our economic policies with an approach that takes different scenarios into account and strengthens resilience against external shocks," Yılmaz said.

'Program producing concrete results'

At the same time, he cited the gains of the economic program so far.

"Within the framework of the policies we have implemented, confidence in the Turkish lira has continued to increase," he suggested.

"The rise in the share of TL deposits in total deposits from 31.6% to 61.5% as of Aug. 28 has been a concrete indication that the policies we have been pursuing are right," he maintained.

He also recalled that the exit from the KKM scheme, a form of contingent liability, had been completed without disruption and said that despite uncertainties in the global economic outlook and geopolitical risks, "our gross reserves have increased by $89.7 billion to reach $188.2 billion as a result of the policies we have implemented with determination."

"This strong increase in reserves supports the resilience of our economy against external shocks," he added.

"Despite geopolitical tensions, our risk premium has also declined significantly, falling from levels in the 700s to below 220 (points)," Yılmaz said.

Similarly, he pointed out that annualized exports have reached $280 billion as of August, while underscoring the improvement in the composition of the exports, with the share of medium- and high-tech exports on the rise.

However, due to rising energy and commodity prices, there has been a "temporary pressure" on the external balance, Yılmaz said.

"The current-account deficit as a share of GDP was 1.8% in June 2024 and 1.6% in June 2025. As of June 2026, this ratio had risen to 2.3%. We calculate that 0.7 percentage points of this increase was attributable to the war," he maintained.

Growth, unemployment figures

In addition, the vice president shared the expectations for growth and unemployment figures in the new 2027-2029 period.

He said that the growth is expected to rebound to 5% in 2029 after hitting 4.2% in 2027 and 4.6% in 2028, adding that the goal is to have "balanced and sustainable growth."

He also conveyed the projections of the unemployment rate reaching 8.1% this year before falling to 8% next year, 7.8% in 2028 and 7.6% in 2029.

Yılmaz also stated that they aim to gradually reduce the budget deficit and continued: "Last year, we projected a budget deficit of 3.5% of national income for 2026, and with the measures we have taken, we expect to achieve it at 3.1%."

Among others, he also said they expected the Turkish economy to reach $1.8 trillion in size by the end of this year for the first time.

He also wished the program to be auspicious for the country.

The unveiling of the program was attended by other top officials, including Treasury and Finance Minister Mehmet Şimşek and the governor of the Turkish central bank, Fatih Karahan.