The government program against soaring prices faced a significant setback when new data revealed that inflation is already on the verge of exceeding year-end targets in the first four months of 2026.
TurkStat said on May 4 that consumer prices rose by 4.18% in April alone. This figure pushed the annual inflation rate to 32.37%. Both figures were higher than market expectations.
The cumulative inflation for the first four months reached 14.64%, a rate very close to the central bank’s year-end goals. The bank previously set a year-end inflation target of 16%, with a revised forecast range of 15% to 21%.
For the 16% target to remain viable, monthly price increases would need to average just 0.19% for the remainder of the year. This scenario is considered highly unlikely given historical trends.
The independent Inflation Research Group (ENAG) calculated even higher figures than TurkStat, placing monthly inflation at 5.07% and the annual rate at 55.38%. Despite the usual discrepancy between official and independent data, the gap between TurkStat and ENAG narrowed more than usual this month.
FORECASTS GOING HIGHER
Following the release of official inflation data, Goldman Sachs expressed skepticism about the government’s ability to curb price hikes. The bank released a report forecasting Turkey's year-end inflation at 26%, which is five percentage points higher than the central bank’s upper estimate.
Goldman Sachs suggested that continued price pressures might force the central bank to keep interest rates as high as 34% through the final quarter of the year.
ERDOĞAN DETERMINED
President Recep Tayyip Erdoğan acknowledged the severity of the situation but maintained his support for the economic program led by Finance Minister Mehmet Şimşek.
'Inflation is unfortunately one of the areas where we feel the effects of the (Iran) war most intensely,' Erdoğan said. 'Even though we are walking against the wind in the fight against inflation, there is not the slightest retreat in our will. We are determined to move forward with firm steps on the path we know is right.'
Over the past three years — since Şimşek took office as finance minister and said “Turkey has no choice but to return to a rational economic footing” — the consumer price index (CPI) has risen by 216%.
FIFTH-HIGHEST INFLATION COUNTRY
With stubborn inflation, Turkey was a global outlier in price increases. With an annual rate of 32.37%, Turkey now ranks as the fifth-highest inflation nation in the world, trailing behind Venezuela (649%), South Sudan (113%), Iran (50%), and Argentina (32.6%).
The disparity is even more pronounced within Europe, where Turkey holds the highest inflation rate by a wide margin. While the European Union average sits at 2.3%, Turkey’s single-month increase of 4.18% in April surpassed the total annual inflation of 31 different European countries. In contrast, Romania and Ukraine, the next highest in Europe, reported annual rates of 9.9% and 7.9%, respectively.
Analysts warned that as monthly increases continue to outpace the annual inflation of over 120 other countries, the central bank may be forced to officially revise its year-end targets in the coming weeks.
