Turkish cenbank raises 2026 forecast, revises communication

By Ezgi Erkoyun and Can Sezer

ISTANBUL (Reuters) -Turkey’s central bank kept its year-end inflation mid-point forecast at 24%, unchanged from the previous quarterly report, while raising its end-2026 forecast to 16% from 12%, Governor Fatih Karahan said on Thursday.

Presenting the bank’s quarterly inflation report in Istanbul, Karahan said the bank raised its forecast for end-2027 inflation to 9% from 8%.

Last month, the bank cut interest rates by 300 basis points to 43%, resuming an easing cycle that had been disrupted by political turmoil earlier this year, as markets have since calmed and disinflation continued.

Karahan said the bank was revising its medium-term forecast communication, unveiling a new framework that emphasises inflation forecasts in the inflation report and year-end interim targets.

Alongside forecasts that can be updated with incoming data, the bank will set interim targets that will remain unchanged barring extraordinary developments and guide its internal monetary policy path, he said.

The governor added that the bank will maintain its tight policy stance to ensure disinflation while implementing effective liquidity management.