Turkey’s central bank on November 7 raised its end-2025 official inflation "forecast" range to 31-33% in its latest quarterly inflation report from the previously stated range of 25-29% that was provided in an August report.

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, the authority also introduced a new term, namely “interim targets”. It left its end-year “interim target” unchanged at 24%. The official inflation target also remains untouched at 5% y/y.

The “interim target” was already null, staying out of the “forecast range”, when it was first introduced in August. It is now even further away from the range.

Above 20% at end-2026

On February 12, the central bank will release its next quarterly inflation report, the first of 2026, which will include updated forecasts.

For end-2026, the authority’s “forecast range” remains unchanged at 13-19% with the “interim target” standing at 16%.

In the February report, an upgrade is not expected for the end-2026 numbers, while it is almost certain that they will move up across the year.

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

About 33% y/y since July

On November 3, the Turkish Statistical Institute (TUIK, or TurkStat) said that Turkey’s consumer price index (CPI) inflation officially crept down from 33.29% y/y in September to 32.87% y/y in October.

Official inflation stood at 44% y/y at end-2024. It has stayed at about 33% since July this year.

With the January 2026 data, the TUIK will change its base year in its official CPI series to 2025 from 2003. The revision will most probably solve the "above-30%" deadlock.

Failed again

Despite the helpful input of the TUIK, which critics say prefers releasing favourable figures at the expense of further diminishing its already flimsy credibility, and the global disinflation period abroad, Turkey’s central bank has failed once again in reaching its own goals.

It anticipated that the seasonally-adjusted monthly inflation figures would fall below the 1.5%-level starting from 3Q25 and end the year at a little above the 1%-level.

The TUIK, meanwhile, released average seasonally-adjusted monthly inflation of 2.62% for 3Q25. The latest October release does not suggest any improvement in the last quarter.

No policy shift expected

No personnel or policy shift is expected. Albeit with a certain slowness, Turkey’s economy management team, which has a single job (namely, pulling in some FX), does its job, attracting carry trade and debt inflows.

Foreigners, meanwhile, have yet to show a significant interest in Turkey's equities and domestic lira bonds.

In April, deputy central bank governor Cevdet Akcay will hit 65 years of age. According to Turkish legislation, that is the age limit at which public servants must retire. However, the political authority is able to provide exemptions.

The finance industry has a real fondness for Akcay, a former banker who talks in the terminology that makes the industry happy. They wonder whether Akcay will remain in post.

In any case, with or without him, the current policy set, namely providing the finance industry with high real returns without any supportive fiscal and structural measures, will remain in place.

December 11 to bring year’s final rate cut

On October 23, the monetary policy committee (MPC) of the central bank cut its main policy rate (one-week repo) by 100 bp to 39.5%. 

On December 11, the authority will hold its last rate-setting 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, any decision between no cut and a cut of up to 300 bp would be no surprise. Developments in the upcoming one-month period will be determinative.

The USD/TRY pair remains under control. Turkish borrowers’ eurobond auctions remained strong. 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) on October 24, the political stress that was bugging the finance industry dissolved.