CBRT Keeps 2025 Inflation Forecast at 24%, Raises 2026 and 2027 Targets

The Central Bank of the Republic of Türkiye (CBRT) has kept its 2025 year-end inflation forecast unchanged at 24%, while revising the 2026 projection from 12% to 16% and the 2027 forecast from 8% to 9%.

Speaking at the Inflation Report 2025-III Briefing at the Istanbul Financial Center, CBRT Governor Fatih Karahan pledged to continue all necessary measures to bring inflation down in line with interim targets.

Global Outlook
Karahan noted that while uncertainty in global trade policies has eased slightly, it remains high. Despite agreements being reached with lower tariff rates compared to previous announcements, elevated sector-specific tariffs persist. These uncertainties continue to weigh on global economic expectations, even though a modest improvement in the growth outlook has been observed.

Energy commodity prices have risen since the last report period, with weak demand and production increases limiting further gains. In non-energy sectors, industrial metal prices increased, partly due to customs tariffs.

Domestic Developments
Karahan emphasized that the tight monetary policy has helped maintain a balanced demand composition. In the first quarter of 2025, private consumption growth slowed, reducing its contribution to GDP, while net exports made a positive contribution thanks to higher exports and lower imports.

He added that financial tightening has weakened domestic demand but improved the external balance.

Inflation Trends
Türkiye’s disinflation process, which began in June 2024, continues uninterrupted despite financial market volatility and geopolitical developments. Consumer inflation dropped to 33.5% in July, marking a 42-point decline. Preliminary August data suggest this downward trend will persist.

While inflation has remained within the forecast range and even below market expectations over the past three months, service sector inertia remains a risk. The median inflation measure points to an underlying trend of around 25%, signaling further disinflation ahead.

Revised Projections
Karahan confirmed the 2025 year-end forecast at 24%, with interim targets set at 16% for 2026 and 9% for 2027. He reiterated the CBRT’s commitment to achieving these goals through strict policy implementation.