Türkiye central bank lifts 2027 interim inflation target to 21 per cent
The bank now expects inflation to end 2026 at 29.5 per cent, up from 28 per cent, as oil and food assumptions rise.
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Türkiye's central bank raised its 2027 interim inflation target to 21 per cent from 15 per cent on 12 November and now expects consumer inflation to end 2026 at 29.5 per cent, the bank said in its fourth inflation report of the year.
The Central Bank of the Republic of Türkiye kept its interim target for 2026 at 24 per cent and lifted the 2028 target to 13.5 per cent from 9 per cent, according to the Inflation Report 2026-IV. Under the new path, inflation is still above 20 per cent at the end of 2027; the August path had it at 15 per cent by then.
The new path runs from 29.5 per cent at the end of 2026 to 21 per cent at the end of 2027, then to 13.5 per cent at the end of 2028 and 9 per cent in 2029, before settling at the bank's medium-term target of 5 per cent, the report's medium-term projections chapter says. In August the previous report had raised the end-2026 figure to 28 per cent from 26 per cent and put the end-2027 figure at 15 per cent, Euronews reported at the time.
Oil and food push the forecast up
The bank now assumes an average oil price of $97.2 a barrel for 2026, against $87.8 in the August report, and $86.7 for 2027, against $76.4. It expects import prices to rise 10.6 per cent on average in 2026, up from the 6.9 per cent it assumed in August. For 2027 it expects import prices to fall 0.1 per cent on average, against a fall of 0.4 per cent in the previous report.
Food is the other driver. The bank raised its end-2026 forecast for food price inflation to 31.3 per cent from 28.5 per cent, and its end-2027 forecast to 24 per cent from 19 per cent.
Consumer inflation fell to 29.8 per cent in October, the chapter says, though it came in slightly above the level the previous report had projected. The bank's B core index stood at 28.5 per cent, below the 28.9 per cent the August report had pencilled in for the month.
The bank's estimate of the output gap for the third quarter is unchanged at minus 1.6 per cent, and it kept its export-weighted global growth assumptions at 1.6 per cent for 2026 and 2.5 per cent for 2027.
Policy stays tight after the October cut
The report says the bank cut its one-week repo auction rate by 100 basis points in October. That decision took the policy rate to 36 per cent. The forecasts assume that a tight policy stance continues, and the chapter gives no figure for the future policy rate.
Since the second report of 2026 the bank has described the risks to its forecast in words rather than in published forecast ranges, and the new chapter follows that practice. The February report had still shown a range for end-2026 inflation, of 15 to 21 per cent, Euronews reported in August.
Governor Fatih Karahan presented the report in Istanbul on Thursday 12 November, the Yeni Bakış news site reported the week before. The report follows a year in which the bank moved from a hold at 37 per cent in September to a cut in October.
The 5 per cent goal stays in place
The new figures are interim targets. The official end-2027 figure is six points higher than the 15 per cent of August and the 2028 figure four and a half points higher, while the medium-term target of 5 per cent is unchanged, the chapter shows. Banks that price lira loans and deposits against expected inflation, and companies that index contracts to it, now have a higher official reference for the next two years.