President Recep Tayyip Erdoğan used his speech on Thursday to stress the Turkish government's inflation-fighting effort and tried to assure households they will feel a relief from the high cost of living more this year.
"The impact of the steps we have taken will be reflected more clearly in kitchens, markets and rents. Our citizens will increasingly feel the decrease in the cost of living in their daily lives," Erdoğan told an event in Ankara.
Türkiye has pursued tight monetary and fiscal policies since mid-2023 in order to tame stubborn inflation, which eased steadily and ended 2025 at 30.89% annually, the lowest rate since November 2021.
But given new-year price updates and a 27% rise in the minimum wage for 2026, inflation readings beginning in January are expected to be volatile.
That, among others, appeared to have prompted the Turkish central bank to lower its key interest rate by a less-than-expected 100 basis points to 37% on Thursday.
The cut to the one-week repo rate at the bank's first policy meeting of the year marked its fifth consecutive easing move since last summer.
The bank has eased by 900 basis points since last summer, and by 1,300 points since 2024 when it had held rates at 50% for most of that year to wrestle down inflation expectations.
Erdoğan said they had achieved "good results" in the fight against the cost of living and expressed optimism inflation would reach "much lower levels" this year.
The central bank projects inflation to dip as far as 16% by the end of 2026, within a 13%-19% range.
"We are managing the fight against inflation with comprehensive policy steps that are consistent and complementary," Erdoğan said. "We are entering a different era where we will reap the fruits of our sacrifices."
