Turkey raises year-end inflation forecast to 28.4%

Turkey raised its forecast for inflation at the end of 2026 to 28.4% when Vice President Cevdet Yilmaz presented the government's 2027–2029 economic programme on September 6, Euronews reported. The previous medium-term programme had envisaged 16% for the same year.

Yilmaz attributed part of the revision to the Middle East war. The programme projects inflation declining to 21% in 2027, 13.5% in 2028 and 9% in 2029. These figures describe the government's expected path, not achieved outcomes or independently established predictions. The new document therefore resets expectations while preserving disinflation as a policy objective.

Pressure on an existing stabilisation effort

British government economic guidance updated on July 30 provides relevant background. It describes Turkey's stabilisation policies since 2023 as combining tighter monetary conditions, fiscal consolidation and rebuilding foreign-exchange reserves. The assessment says these measures improved financial stability but that inflation remained high internationally. It also identifies regional instability and global energy prices among the vulnerabilities facing the economy. This earlier assessment helps explain the policy challenge; it does not independently confirm September's forecast.

The same guidance describes Turkey as an important manufacturing, logistics and energy hub linking Europe, Asia and the Middle East. It records continuing negotiations to update the UK–Turkey trade agreement, following their launch in June 2025. That commercial relationship makes domestic price stability relevant beyond Turkey's borders: inflation and exchange-rate uncertainty affect operating costs and pricing for businesses working across the two markets. The guidance also notes that Turkey's banking system remained liquid and well capitalised.

Trade cooperation continues alongside economic adjustment

A separate European Commission announcement on July 16 documented an agreement to recognise Turkish and EU trusted-trader programmes mutually. Its intended benefits include stronger supply-chain security and more efficient controls for legitimate trade. The announcement made entry into force conditional on establishing structured exchanges of information about authorised operators. It illustrates an existing effort to improve commercial processes, rather than a measure adopted in response to the newly revised inflation forecast.

The coming inflation releases will test the revised trajectory. For households and companies, a declining inflation rate would still mean rising prices, only more slowly. The central question is whether stabilisation policies and external conditions can deliver the programme's projected moderation without assuming that publication of a forecast guarantees the result.