14.02.2026 09:11
The IMF stated that Turkey's disinflation program is showing successes, saying, "The current policy mix continues to balance disinflation with stable growth."
The International Monetary Fund Executive Board has completed the Article IV consultation with Turkey for the year 2025.
In a statement from the IMF, it was noted that inflation decreased from an annual rate of 49.4% in September 2024 to 30.9% in December 2025, thanks to strong fiscal consolidation, prudent revenue policies, and a tight monetary policy stance.
The statement included the expression, "Since the Article IV consultation in 2024, Turkey's disinflation program has shown successes."
It was stated that despite a temporary slowdown experienced in the middle of 2024, Gross Domestic Product growth continues to remain strong, with a growth rate projected to be 4.1% in 2025.
It was reported that demand for the Turkish lira has strengthened, supporting international reserves and continuing to finance the current account deficit at a sufficient level.
"TIGHT MONETARY POLICY IS EXPECTED TO SUPPORT DISINFLATION"
The statement emphasized that a tight monetary policy, moderate wage increases, and an overall neutral fiscal policy are expected to support gradual disinflation, noting that "The current policy mix continues to balance disinflation with stable growth."
With strong domestic demand, it was indicated that inflation at the end of 2026 is expected to be 23% on an annual basis, and with further reductions in the policy interest rate and the impact of increasing confidence, the growth rate is projected to be 4.2% in 2026.
Additionally, the statement mentioned that the current account deficit will continue to be financed at a sufficient level, and that the confidence of depositors and strong gold prices will help keep reserves around 80% of the IMF's adequacy criterion.
While growth is expected to remain solid and inflation to decrease, the statement pointed out that this approach also involves risks and costs, highlighting that external risks remain high due to ongoing uncertainties in global trade and regional conflicts.
It was noted that adverse shocks such as rising energy prices or negative weather events could further extend the period of high inflation, and that the gradual approach to disinflation has negatively affected the financial sector and slowed productivity growth.
EMPHASIS ON AMBITIOUS STRUCTURAL REFORMS
The statement also included assessments from the IMF Executive Board.
It was reported that officials were appreciated for the significant successes of Turkey's disinflation policies, which have reduced macroeconomic imbalances, increased confidence, and maintained strong growth.
It was emphasized that, as inflation still remains above the target and the economy is vulnerable to shocks, there is a need for a tighter macroeconomic policy mix and ambitious structural reforms to make disinflation permanent, strengthen external buffers, and support inclusive medium-term growth.
The statement noted that officials were appreciated for the strong fiscal effort shown last year and that fiscal tightening should also be maintained to support disinflation.
Highlighting the role of measures to broaden the tax base and increase compliance, the importance of additional efforts to rationalize expenditures through the gradual removal of energy subsidies was pointed out.
As fiscal space expands, it was expressed that additional resources could be directed towards social priorities, and it was emphasized that wage policies should be fully aligned with inflation targets and that oversight of public-private enterprises and public economic enterprises should be strengthened.
"FINANCIAL SECTOR MAINTAINS SOLIDITY"
It was noted that there is a call for a tighter monetary policy to ensure a generally stable disinflation, but that adjustments to the policy interest rate should remain data-dependent and consider macro-financial effects.
The importance of the Central Bank's independence and communication was highlighted, and it was recommended that foreign exchange interventions be limited to softening volatility, allowing for more flexibility in the exchange rate as inflation expectations are better anchored and reserve buffers are rebuilt.
It was stated that the financial sector has maintained its solidity thanks to the rapid and effective intervention of officials in response to market stress.
The statement emphasized that caution should be maintained regarding high foreign exchange liquidity risks and that ongoing efforts to strengthen supervisory and resolution frameworks are supported.
While calling for structural reforms to increase productivity, resilience, and medium-term growth, priority areas were listed.
ECONOMIC FORECASTS
The statement included forecasts regarding the Turkish economy, indicating that Turkey's economy is expected to grow by 4.1% in 2027 and by 4% in the years 2028-2031.
The unemployment rate is projected to be 8.3% in 2026, 8.7% next year, and 9.1% during the 2028-2031 period.
It was reported that inflation is expected to decrease to 19% next year and then to 15% by 2031, and that the ratio of the current account deficit to Gross Domestic Product is expected to be 1.4% during the 2026-2028 period and 1.5% during the 2029-2031 period.