KARAHAN: POLICY WILL BE TIGHTENED IF TARGET IS MISSED
Central Bank Governor Fatih Karahan said that if the inflation target is missed, monetary policy will be tightened.
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THREE-YEAR ECONOMIC ROAD MAP UNVEILED; 2025 INFLATION TARGET RAISED 11 POINTS
Vice President Cevdet Yılmaz unveiled the Medium-Term Program for 2026–28, raising the end-2025 inflation target by 11 points from the previous plan. Yılmaz said real GDP growth targets are 3.8% in 2026, 4.3% in 202, and 5.0% in 2028. The inflation path is 28.5% for end-2025, 16% for end-2026, 9% for 2027, and 8% for 2028.
ARBITRATION BOARD IMPOSES BELOW-INFLATION RAISES ON 6.5 MILLION PUBLIC SERVANTS
The Public Servants Arbitration Board has finalized wage hikes for 6.5 million civil servants and retirees, setting raises far below inflation and poverty thresholds after collective bargaining collapsed.
İŞ BANK SEES 29% INFLATION, 35% INTEREST RATES AT END-2025
Hakan Aran, head of İş Bank, the country’s largest private lender, said they expect Turkey’s annual inflation to drop to 29% by the end of 2025, with interest rates falling to 35%. Aran shared his predictions regarding the economic normalization process at a press conference. According to Aran, “we may see monthly inflation rates drop below 1% as the normalization process begins in May 2026.”
CENTRAL BANK UPS INFLATION TARGETS FOR 2026, 2027
Central Bank Governor Fatih Karahan said inflation is expected to stand between 25% and 29% at the end of 2025, and between 13% and 19% in 2026.
CENTRAL BANK CUTS RATES BY 3 POINTS DESPITE ONGOING INFLATION RISKS
The Central Bank lowered its one-week repo rate from 46% to 43% on July 24, despite warning signs that inflation pressures persist. This was the first cut following the April rate hike. The Monetary Policy Committee also reduced the overnight lending rate from 49% to 46% and the overnight borrowing rate from 44.5% to 41.5%. While June’s core inflation trend remained unchanged, preliminary indicators pointed to a temporary rise in July inflation due to month-specific factors.
THREE FOREIGN POLICY POLES AT THE CHP
Turkey is hit by fallout from inflation-fighting monetary policy. From textiles to automobiles, there are thousands of layoffs in several sectors. The high cost of living is a major source of complaint while the health sector is in crisis too as even patients in need of urgent operations can only get an appointment in six months from state hospitals. Even hard-core AKP voters complain about the quality of education.