Türkiye's end-2026 inflation forecasts tick higher, 12-month view improves
People walk in the famous Eminönü neighborhood in Istanbul, Türkiye, July 28, 2026. (AA Photo)


Inflation expectations among market participants in Türkiye rose slightly for the end of the year but dropped for the 12-month horizon, a survey showed on Friday.

According to the Central Bank of the Republic of Türkiye's (CBRT) survey for August, year-end consumer price inflation is expected to reach 29.43%, up from 29.21% in the previous survey.

The 12-month inflation forecast declined to 23.69% from 23.95%, indicating that participants continue to expect disinflation over the coming year despite a slightly higher projection for the end of 2026.

Forecasts for inflation in 24 months time, however, edged up to 18.03% from 17.83%, the survey showed.

Türkiye's annual consumer price inflation eased to 31.75% in July 2026, down from 32.11% in June.

On Thursday, the CBRT adjusted its end-2026 inflation forecast upward to 28% from 26% mainly due to energy and food price pressures. But it left its interim target unchanged at 24%.

The bank also kept its interim inflation targets for end-2027 and end-2028 at 15% and 9%, respectively.

Friday's survey also showed a weaker outlook for the Turkish lira. Participants raised their year-end U.S. dollar/lira forecast to 51.66 from 51.55, while the 12-month exchange rate expectation increased to 57.43 from 56.69.

Growth expectations were broadly unchanged. Respondents maintained their 2026 GDP growth forecast at 3.1%, while trimming their projection for the following year to 4% from 4.1%.

The survey continued to point to expectations of gradual monetary easing by the central bank.

Participants expect the CBRT to keep its policy rate at 37% at its next Monetary Policy Committee (MPC) meeting. They see the one-week repo rate declining to 36.13% at the following meeting and 35.25% at the third meeting.

Respondents now expect the policy rate to stand at 29.59% in 12 months time, slightly higher than in the previous survey.

Higher oil prices that have weighed on inflation expectations have prompted the CBRT to keep its one-week repo rate unchanged for four straight months.