Turkey’s central bank on Thursday raised its end-2026 inflation target to 24 percent from 16 percent, acknowledging that inflation is no longer expected to fall as quickly as planned after energy and food price shocks from the war involving the United States, Israel and Iran.
The central bank also said it now expects annual inflation to end 2026 at 26 percent, above the 15 percent to 21 percent forecast range it had announced in February.
Central Bank Governor Fatih Karahan announced the revisions while presenting the bank’s second inflation report of the year in İstanbul, the state-run Anadolu news agency reported.
Karahan said the bank raised its interim inflation targets for 2026, 2027 and 2028 to 24 percent, 15 percent and 9 percent, respectively. The previous targets were 16 percent for 2026, 9 percent for 2027 and 8 percent for 2028.
“Under the outlook I have summarized, we estimate that inflation will be 26 percent at the end of 2026, 15 percent at the end of 2027 and 9 percent in 2028,” Karahan said.
The distinction between the target and the forecast is significant. The 24 percent figure is the central bank’s revised target for the end of 2026, while 26 percent is its forecast for where inflation will actually stand at the end of the year.
The bank’s February inflation report had projected that inflation would end 2026 between 15 percent and 21 percent, with a 70 percent probability. The new 26 percent forecast is above that range, showing a deterioration in the official inflation outlook.
Karahan said the bank made what he described as “extraordinary” updates to its assumptions because of geopolitical developments, weaker foreign demand and increases in oil, import and food price assumptions.
The central bank raised its 2026 oil price assumption to $89.40 a barrel from $60.90 and its food inflation assumption to 26.3 percent from 19 percent. It also raised its import price assumption to 6.3 percent from 2 percent.
Annual consumer inflation stood at 32.37 percent in April, up from 30.87 percent in March, according to official data. Monthly inflation was 4.18 percent in April.
Turkey has been trying to bring inflation down after years of price increases, currency weakness and policy shifts. The government of President Recep Tayyip Erdoğan returned to rate hikes and tighter monetary policy after the 2023 elections, reversing a low interest rate policy that economists said fueled inflation and weakened the Turkish lira.
The central bank kept its main policy rate at 37 percent at its April meeting after cutting it by 100 basis points in January. Karahan said the bank had kept policy tight in March and April because of risks to the inflation outlook.