The central bank has raised its year-end inflation forecast for 2026 to 28 percent from 26 percent.
During his presentation for this year’s third Inflation Report on Aug. 13, Governor Fatih Karahan said that the main 2026 forecast was revised upward; however, the interim target remains at 24 percent. The year-end forecast for 2027 was held unchanged at 15 percent.
The bank also raised its 2026 food inflation forecast from 26.3 percent to 28.5 percent, which reflects persistent price pressures on household budgets.
Karahan said that despite a recent slowing in disinflation, the central bank remains committed to maintaining a restrictive stance.
“We expect the disinflationary process in demand conditions to continue through the rest of the year,” he said. “We are resolutely maintaining our tight and cautious stance.”
Addressing external risks, Karahan pointed to volatile global energy markets and geopolitical tensions as key upward threats to inflation.
“Depending on the course of war and ceasefires, oil and natural gas prices remaining higher for longer stands as the primary upward risk,” Karahan stated. “Increases in diesel prices stemming from refinery margins also keep upward risks on energy prices alive.”
Acknowledging past discrepancies between official targets and actual figures, Karahan defended the central bank’s policy track record amid recent economic shocks.
“Looking at the last three years, we must accept that inflation remained above our predictions and targets,” he said. “We faced many negative external shocks. Without tight monetary policy, we would have seen much higher levels. Price stability is essential for permanent welfare gains, and we will maintain our disinflation-focused tight stance.”
