ING Global Sets 2026 Outlook for Turkey: Inflation, Rates, and the Dollar Path

ING Global has released its latest outlook for the Turkish economy, outlining expectations for inflation, interest rates, and the exchange rate through 2026. The report presents a cautiously optimistic scenario, forecasting a gradual slowdown in inflation and a measured easing in monetary policy, while emphasizing that upside risks remain firmly on the radar. Central to the analysis is the exchange rate’s role in supporting Turkey’s ongoing disinflation process.

A Medium-Term View of Turkey’s Economic Trajectory

According to ING Global’s updated assessment, Turkey’s macroeconomic outlook is expected to improve gradually over the next two years. The institution highlights that the country has entered a phase where disinflation dynamics are becoming more visible, supported by tight monetary conditions and coordinated policy measures. However, ING underlines that this transition remains fragile and requires sustained discipline.

The report frames 2026 as a potential milestone year, assuming policy consistency is maintained. While the direction of key indicators is projected to be positive, ING stresses that economic balances remain sensitive to both domestic and global developments, justifying a prudent and vigilant stance.

2026 Targets: Inflation Seen at 22%, Policy Rate at 27%

One of the most closely watched elements of the report is ING Global’s revised inflation and interest rate projections. The institution expects consumer inflation to decline to around 22% by 2026, reflecting a continuation of the disinflation trend already underway. This forecast signals confidence that price pressures can be gradually brought under control, albeit not without challenges.

In parallel with easing inflation, ING anticipates a reduction in the policy interest rate to approximately 27% by 2026. This implies a controlled normalization of monetary policy rather than an aggressive easing cycle. ING explicitly cautions that although a downward trajectory is projected, upside risks to both inflation and interest rates have not disappeared, particularly in the face of potential external shocks or domestic cost pressures.

The Exchange Rate’s Role in Disinflation

A central theme of ING Global’s analysis is the relationship between the exchange rate and price stability. The report emphasizes that exchange rate movements are expected to remain broadly compatible with disinflation goals, rather than acting as a destabilizing force.

ING notes that the pace of currency depreciation is likely to follow a path that supports the slowdown in inflation. This suggests a scenario where sharp or disorderly movements in the Turkish lira are avoided, helping to limit imported inflation and reduce pressure on domestic prices.

In addition, the report highlights the importance of administered and regulated prices, such as those influenced by government decisions. ING expects these price increases to remain aligned with the Central Bank of the Republic of Turkey’s (CBRT) inflation targets, reinforcing the broader disinflation framework.

Dollar/TL Outlook: A Gradual and Controlled Rise

ING Global also provides detailed forecasts for the USD/TRY exchange rate, offering a step-by-step projection over the next 12 months. Rather than predicting abrupt shifts, the institution envisions a gradual upward trend that remains consistent with macroeconomic adjustment.

According to the report, the US dollar is expected to trade at around 43.70 TL in one month, reflecting near-term stability. Over a three-month horizon, the exchange rate is projected to rise to approximately 45.10 TL, pointing to a controlled adjustment rather than sharp volatility.

Looking further ahead, ING’s six-month forecast places the dollar at 47.20 TL, suggesting that depreciation pressures persist but at a measured pace. The institution’s 12-month projection of 51.00 TL represents its long-term baseline scenario, assuming that exchange rate dynamics remain consistent with inflation-reduction efforts.

ING underlines that this trajectory is not designed to undermine price stability. On the contrary, the report argues that currency movements are expected to evolve in a way that complements the disinflation process, rather than conflicting with it.

Risks Remain on the Upside

Despite the relatively constructive outlook, ING Global repeatedly emphasizes the need for caution. The report warns that upward risks continue to dominate the balance of risks, particularly if global financial conditions tighten or commodity prices rise unexpectedly. Domestic factors, including wage dynamics and inflation expectations, are also identified as potential sources of pressure.

As a result, ING’s projections are presented not as guarantees, but as conditional forecasts that depend heavily on the continuation of current policy frameworks. Any significant deviation from disciplined monetary and fiscal policies could alter the inflation, interest rate, and exchange rate paths described in the report.

A Cautiously Optimistic Baseline for 2026

Overall, ING Global’s 2026 projection paints a picture of gradual normalization rather than rapid stabilization. Inflation is expected to decline meaningfully but remain elevated by global standards. Interest rates are projected to fall, yet stay firmly in restrictive territory. Meanwhile, the exchange rate is forecast to adjust in a controlled manner, supporting the broader disinflationary goal.

The report suggests that Turkey’s economic outlook hinges on policy continuity and careful risk management. If these conditions are met, 2026 could mark a period where price stability improves, financial conditions ease moderately, and the exchange rate aligns more closely with macroeconomic fundamentals—without undermining the fragile gains achieved in the disinflation process.