New medium-term program targets 9% annual inflation by end-2029

The Medium-Term Program covering 2027-2029 projects that annual consumer inflation, which stood at 31.51% in August, will fall to 28.4% by the end of 2026. The program aims to reduce inflation to 21% in 2027, 13.5% in 2028 and 9% in 2029.

Scraper SystemSeptember 07, 2026, 01:33 PM

New medium-term program targets 9% annual inflation by end-2029

The Medium-Term Program covering 2027-2029 aims to maintain the disinflation process in a firm and uninterrupted manner. The program's primary objective is to break the inertia in inflation, reduce the inflation rate to single-digit levels by the end of the program period and ensure price stability.

Under the program, strong coordination among monetary, fiscal and income policies is planned to continue. The program projects that aggregate demand conditions will contribute to the decline in inflation, cost conditions will improve, competition in product markets will be strengthened and production potential will be increased through supply-side policies.

Inflation expectations and monetary policy

The Central Bank of the Republic of Türkiye is expected to continue using all policy tools effectively until price stability is permanently achieved. The program aims to maintain the inflation-targeting framework and the floating exchange-rate regime, with exchange rates determined by the balance of supply and demand under free-market conditions.

Communication channels are expected to be strengthened to ensure that inflation expectations develop in line with the targets. The program also includes efforts to raise awareness of the “Market Prices” website, which shares prices from chain retailers, in order to increase market transparency.

The program aims for pricing behavior based on past inflation to gradually shift toward pricing based on inflation expectations. It plans to reduce price rigidities by increasing the alignment of administered and guided prices with inflation forecasts and targets.

Food supply security

The impact on public finances, market dynamics and program targets will be taken into account when determining purchase prices for agricultural products. This approach is expected to help reduce the practice of indexing prices to past inflation.

Short- and long-term supply and demand balances for food and agricultural products, as well as changes in imports and exports, will be monitored through an early-warning approach. Production planning for strategic agricultural products will continue by taking into account supply and demand balances, sufficiency levels, water constraints and regional production potential.

Year-end inflation targets

According to the program's projections, annual consumer inflation is expected to reach 28.4% by the end of 2026. The year-end inflation target has been set at 21% for 2027, 13.5% for 2028 and 9% for 2029.

The program also aims to establish a more balanced income distribution and contribute to lasting improvements in prosperity as inflation declines.

New medium-term program targets 9% annual inflation by end-2029