Turkey's inflation stays double‑digit as industrial output stalls

Since 2018 Turkey’s inflation accelerated from about 20% to 36% by the end of 2021 and peaked at 85% in 2022, the highest in 24 years. Although the rate has begun to fall, it remains in the high double‑digit range. The Central Bank of the Republic of Turkey (TCMB) has kept its policy rate at 37% and, after pausing its forecast ranges, set an interim 2026 inflation target of 24% for the year‑end, with a 26% point forecast. Longer‑term projections aim for 15% by the end of 2027 and 9% by the end of 2028.

Industrial production data for May 2026 show virtually no year‑on‑year growth, while seasonally‑adjusted monthly figures slipped 2.9%. The decline is driven mainly by a 12.7% fall in capital‑goods output and an 11.5% drop in mid‑high‑technology production. High‑technology output rose 7.9% year‑on‑year, but its impact on total industrial output remains uncertain, highlighting structural fragility in the sector.