Türkiye raises 2026 year-end inflation forecast to 29.5 pct -Xinhua - 新华网

ISTANBUL, Nov. 12 (Xinhua) -- The Turkish Central Bank has raised its year-end inflation forecast for 2026 to 29.5 percent, up from 28 percent.

The year-end inflation forecast for 2027 had also been revised upward, to 21 percent from 15 percent, while the projection for 2028 had been raised to 13.5 percent from 9 percent, Governor Fatih Karahan told a press conference in Istanbul on Thursday.

"Recent data show that the underlying inflation trend is improving clearly. We attach importance to the slowdown in services inflation, particularly in items that previously showed high rigidity," Karahan said when presenting the bank's fourth Inflation Report of the year.

On energy markets, he said crude oil and natural gas prices had risen significantly in September and October, remaining above the levels recorded during the previous report period and before the Iran conflict.

He added that developments around the Strait of Hormuz had affected alternative trade routes, pushing up freight costs through longer transit times and higher insurance premiums.

Karahan warned that geopolitical developments generating supply-side shocks were slowing the decline in headline inflation, keeping upside risks to the inflation outlook elevated and requiring a cautious policy stance.

Turning to economic activity, he said growth had lost momentum in the second quarter, mainly due to a slowdown in domestic demand. Indicators for the third quarter pointed to divergent trends across sectors, with services output rising while industrial production declined.

Separately, Türkiye's Consumer Price Index (CPI) rose 2.58 percent month on month in October, bringing annual inflation to 29.77 percent, according to official data. ■