Turkey aims for single-digit inflation by 2026

REUTERS/Cagla Gurdogan

Turkey is expecting annual inflation to drop to single digits by the end of 2026, according to treasury and finance minister Mehmet Simsek.

Inflation is currently at 65 percent and is expected to drop to 36 percent next year and 14 percent in 2025, Daily Sabah newspaper reported, citing Simsek’s speech at the Turkuvaz Media Center in Istanbul.

He stated that the country’s medium-term programme aims to reduce inflation to single digits, ensure price stability and re-facilitate monetary stability affected by February 6 earthquakes.

The results of current policies will be reflected in the second half of 2024, Simsek added.

He forecast that inflation will follow a permanent downward trend in the next five months, which will be seen on a monthly basis.

Turkey’s central bank recently increased its key policy rate by 250 basis points to 42.5 percent to combat inflation.

Headline inflation edged up in November, but remains in line with the outlook presented in the recent inflation report.

The annual inflation rate surged to 61.98 percent in November, its highest level this year, data released by the Turkish Statistical Institute showed.

Turkey’s central bank expects inflation to rise to 70-75 percent in May before dipping to about 36 percent by the end of next year as tightening cools prices.