Turkey’s central bank on February 12 raised its end-2026 official inflation "forecast" range to 15-21% in its latest quarterly inflation report from the previously stated range of 13-19% that was provided in the previous report released in November.

It is not advisable to plan, price or draw inferences based on Turkey’s official data. There is widespread concern about the reliability of the country’s data series.

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In August 2025, the authority also introduced a new term, namely “interim targets”. In its latest report, it left its end-2026 “interim target” unchanged at 16% despite the upward revision in the forecast range.

The official inflation target also remains untouched at 5% y/y.

Since its introduction, the “interim target” concept has been criticised for being null as the given figures have consecutively fallen outside of the “forecast range”.

Above 20% at end-2026

On May 14, the central bank will release its next quarterly inflation report, the second of 2026, which will include updated forecasts.

As things stand, the realisation is supposed to come in at above the 20%-level by the end of the year.

Currently, the upper end of the new forecast range is within the frame of expectations. It is possible there will be additional limited upward revisions in the upcoming two reports (May and August) prior to the release of the end-2026 inflation figure.

Around 31% since November

On February 3, the Turkish Statistical Institute (TUIK, or TurkStat) said that Turkey’s consumer price index (CPI) inflation officially edged down to 30.65% y/y in January from 30.89% at end-2025.

Official inflation stood at 44% y/y at end-2024. It hovered around 33% between July and October 2025.

Revision to solve "above-30%" deadlock

With the January 2026 data, the TUIK changed the base year in its official CPI series to 2025 from 2003. It also put in place wide-scope changes in its methodology and inflation basket.

The revision, which is entirely in line with Eurostat guidance, is supposed to solve the "above-30%" inflation deadlock with the February release.

A figure of 1.76% for monthly inflation in February would bring the headline figure to 30.00%.

March 12, second rate cut of 2026

On January 22, the monetary policy committee (MPC) of Turkey’s central bank cut its main policy rate (one-week repo) by 100 bp to 37% at its first rate-setting meeting of 2026.

On March 12, the MPC will hold its second rates meeting of the year. Another rate cut is a near certainty. Uncertainty, however, abounds as to the likely size of the cut.

As things stand, another 100-150bp cut is on the cards.

The central bank will hold eight rate-setting meetings in 2026. A 100-150bp rate cut on average per meeting, making for a combined cut of 1,000bp, would bring the policy rate down to 28% at end-2026. Such a path is to be expected.

Dashboard check

On the economic dashboard, the USD/TRY pair remains under control. Turkish borrowers’ eurobond auctions remain strong. Turkey’s five-year credit default swaps (CDS) are testing the 200-level. On the loans side, high debt rollover rates and low costs are observed.

After a local court dropped the case targeting the headquarters of the main opposition Republican People’s Party (CHP) in October, political stress that was bugging the finance industry dissolved.