Turkey’s government has cut its official GDP growth target for 2026 to 3.3% in its latest medium-term programme (OVP) from the previously stated 3.8%, the new OVP released on September 6 showed.

The OVP is updated each year in September. The top economy management officials, who are led by Vice President Cevdet Yilmaz, held a press briefing to release the new programme. The finance minister as well as the central bank governor accompanied Yilmaz in making the presentation.

In September 2025, the 2025 target was cut to 3.3% from the 4% stated in the 2024 OVP. Subsequently, 2025 GDP growth was released at 3.6%. The outcome was revised to 3.7% in the 2Q26 growth release.

The OVPs no longer create much of a stir among observers of Turkey's economic trajectory. New numbers are released in the programmes, but the reliability and seriousness of the official data, as well as the seriousness of the government in presenting the data, are questionable. The reality of the message that goes out appears to amount to no more than, 'The carry trade works, there is no FX scarcity, ergo there is no emergency'.

The finance ministry and its minister as well as the central bank and its governor have not released any statements on the new programme. It was only shared by Yilmaz as well as by the presidency of strategic planning and budgeting.

“Significant but not pessimistic”

In the new OVP, the end-2026 official inflation target is hiked to 28.4% from the 16% targeted in last year's assessment. The government is also currently targeting end-2027 inflation of 21%, end-2028 inflation of 13.5% and end-2029 inflation of 9%.

On August 13, the central bank raised its end-2026 official inflation "forecast" to 28% in its latest quarterly inflation report from the previously stated range of 26% that it announced in May. Since April, Turkey’s official inflation has remained around 32%.

Asked about the new inflation targets, central bank governor Fatih Karahan said: “It is a significant revision, but we do not evaluate it as a revision that would cause pessimism in the inflation outlook.”

“We are not where we desire to be regarding inflation. However, in this difficult climate, it was important that inflation did not spiral out of control,” finance minister Mehmet Simsek said on the matter.

Simsek also said that government spending austerity has proven successful.

Programme assumes no snap poll ahead

Asked whether the possibility of a snap election was considered, Yilmaz said: "When preparing this programme, we worked under the assumption that elections would take place as scheduled, towards the spring or summer of 2028. We did not engage in speculative assumptions."

"These are matters for our parliament to decide. If the election is to be brought forward, that is at the discretion of parliament. We thought it would not be right for us to make an assumption at this stage," he added.

USD/TRY to move up

Turkey's government does not release exchange rate targets but provides nominal GDP targets in Turkish lira (TRY) and USD. The latest programme implies that the government has used an average central bank USD/TRY buying rate of 46.87 for 2026. As of September 7, the figure used stood at 45.31 with the September 7 exchange rate standing at 48.23.

In the September 2025 programme, the average exchange rate for 2026 was assumed at 46.60.