Turkey economic forecasts show rising inflation expectations

Economic stakeholders in Turkey are navigating significant inflationary pressures and shifting market expectations. A survey of 32 banks and brokerage firms indicates a median monthly Consumer Price Index (CPI) expectation of 1.95% for August, with a yearly expectation of 31.63%. Year-end inflation forecasts for 2026 have seen a slight upward revision to 29.50%, while the 2027 year-end forecast rose slightly to 22.90%.

Industry leaders have expressed concerns regarding the impact of these economic conditions. Adem Bulut noted that the construction sector faces rising labor costs and material prices, forcing firms to use internal resources for flexible installment models. Similarly, Ankara Chamber of Industry President Seyit Ardıç warned that industrialists are bearing the heaviest burden of the disinflation program, citing a widening gap between goods and service inflation.

Public sector employees and retirees are also monitoring these trends closely. Forecasts for January 2027 salary increases for civil servants and retirees vary based on different inflation scenarios, with projections ranging from the Central Bank's 28% year-end estimate to higher market expectations. Additionally, the September 2026 rent increase rate will be determined by the 12-month average of the CPI, with official data expected from TÜİK on September 3.