The Central Bank of the Republic of Turkey (CBRT) has raised its year-end inflation forecast for 2025 to 24%, citing factors beyond the control of monetary policy. The bank, however, maintained its inflation forecast for 2026 at 12% and reiterated its commitment to a tight monetary policy stance.
The upward revision for 2025 was attributed to a higher weight for services in the Consumer Prices Index (CPI) basket, updated food inflation, and increased co-payment by patients for medical examinations. Despite the adjustment, CBRT Governor Fatih Karahan emphasized that the revision does not signal any easing of the bank's monetary policy stance.
Karahan highlighted the importance of policy coordination between monetary and fiscal policies to contribute to the disinflation process. The CBRT aims to achieve a sustained decline in inflation and ensure price stability over the long term.
Turkey's annual inflation rate fell to a 19-month low of 42.12% in January, marking the start of a disinflation process. The central bank expects inflation to ease to 8% by 2027, with a long-term goal of stabilizing inflation at 5%.