Turkey Cuts Growth Outlook, Raises Inflation Target to 21 Percent

According to Donya-e-Eqtesad, citing Bloomberg, Turkey's government lowered its 2027 GDP growth forecast to 4.2 percent from 4.3 percent and its forecast for the current calendar year to 3.3 percent from 3.8 percent, in a medium term economic program through 2029 unveiled on Sunday, September 6, 2026 (15 Shahrivar 1405). Turkish Vice President Cevdet Yilmaz announced the targets at a news conference, and central bank governor Fatih Karahan said the main reason for the deviation from earlier estimates was the war in West Asia and the resulting jump in energy prices.

Under the program, the end of 2027 inflation target rose to 21 percent, up from the government's earlier 9 percent forecast and the Turkish central bank's previous 15 percent estimate. Turkey's annual consumer price growth eased to 31.5 percent in August, and the central bank, which had paused rate cuts after the war began, reversed course in August by raising its policy rate back to 37 percent. The 2027 budget deficit forecast was also raised to 3.5 percent of GDP from a previous 3.1 percent.