Turkey Central Bank Revises Inflation Forecast to 28% Amid Energy Price Increases
Turkey's Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan presented the quarterly inflation report in Istanbul on August 13, 2026. He announced that the bank has revised its year-end forecast for 2026 to 28% due to developments related to energy prices, citing mainly higher diesel, natural gas, and commodity prices.
The bank also warned of increasing food prices despite an improvement in domestic production, with Karahan noting a negative divergence in food inflation. The annual consumer inflation stood at 31.75% in July, while annual inflation excluding energy and food remained below 30%. The governor emphasized that the disinflation process has lost some momentum due to supply-side pressures stemming from geopolitical developments.
Karahan stated that tight monetary policy is visible in restraining domestic demand, particularly in categories directly affected by interest rates. He highlighted the importance of maintaining a tight monetary stance until price stability is achieved in line with interim targets. The bank's key interest rate remains at 37%, and Karahan attributed its success to the bank's efforts.
The governor also noted that Türkiye's trade deficit narrowed in the second quarter, with exports increasing and imports excluding gold and energy declining. He added that gross foreign exchange reserves rose by $30 billion from March 27 to reach $185 billion as of August 12, while net reserves excluding swaps increased by $35 billion to $56 billion.