Türkiye lifts its inflation forecast to 29.5% and loosens 2027 targets

What was announced. The Central Bank of the Republic of Türkiye (CBRT) raised its end-2026 inflation forecast to 29.5%. It then sees 21% at end-2027, 13.5% at end-2028 and 9% at end-2029, before inflation settles at the 5% target. The interim targets for 2027 and 2028 were raised from 15% and 9%.

Why. Karahan said war-related developments drove the change. The bank expects energy to stay expensive for longer than it assumed in the last report. Energy prices in Türkiye are up 43% since February, and annual energy inflation hit 51.4% in October. Import price and food assumptions were raised too.

The good part. Annual inflation was 29.8% in October, but the underlying trend is lower. The monthly underlying trend fell to 1.8% in the third quarter, and the annualised trend was 23.7% in October, about 6 points below the headline. Rents and services are slowing. The bank credits tight policy and weak demand.

The rate. In October the bank cut its policy rate by 100 basis points to 36%. Karahan repeated that policy will stay tight until price stability is reached in line with the interim targets. Decisions will follow the trend over several months, not one data point.

Risks. The bank lists geopolitics, gas supply and food prices as the main upside risks. There is a downside risk too: domestic demand may turn out weaker than in the baseline.

Confirmed facts

• The end-2026 inflation forecast was raised to 29.5%, 1.5 points above the previous estimate.^[1][3]
• The interim target for end-2027 rose from 15% to 21%, and for end-2028 from 9% to 13.5%.^[1][2]
• The bank sees 9% at end-2029, then stabilising at the 5% target.^[1]
• Annual consumer inflation was 29.8% in October; annual energy inflation was 51.4%.^[1]
• The annualised underlying trend was 23.7% in October, about 6 points below headline; the monthly trend was 1.8% in Q3.^[1][3]
• The policy rate was cut by 100 basis points to 36% in October.^[1]
• The bank will keep policy tight until price stability is reached in line with the interim targets.^[1]

Implications

• ConfirmedThe bank says outright that disinflation lost pace because of costly energy.
• Our readingHigher targets give the bank more room to keep cutting even if inflation falls slowly. This is our inference.
• Our readingFor lira holders, real returns depend on how far the rate stays above inflation. This is our inference.

Still unknown

• Whether the bank cuts again in December.
• How long energy stays expensive.
• How much disinflation stalls in November.

Who it affects

Türkiye, Emerging markets, Global. People holding lira or Turkish assets, living in Türkiye or tracking emerging markets

Sources

1. Central Bank of the Republic of Türkiye: Başkan Fatih Karahan'ın "Enflasyon Raporu 2026-IV"ün Tanıtımına İlişkin Bilgilendirme Toplantısında Yaptığı Konuşma November 12, 2026 · official
2. BBC News Türkçe: Merkez Bankası yıl sonu enflasyon tahminini yükseltti November 12, 2026 · media
3. Investing.com: ЦБ Турции повысил прогноз инфляции на 2026 год до 29,5% November 12, 2026 · media