Vice President Yılmaz: Inflation is expected to be 28.5% by the end of the year.

08.09.2025 10:43

The Vice President Cevdet Yılmaz held a press conference regarding the Medium-Term Program covering the period of 2026-2028. Sharing the three-year roadmap with the public, Yılmaz stated, "We expect inflation to be 28.5% by the end of the year, 16% in 2026, and 9% in 2027."

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Vice President Cevdet Yılmaz held a press conference regarding the Medium-Term Program (MTP) covering the 2026-2028 period. Sharing the 3-year inflation forecast with the public, Yılmaz stated, "We expect inflation to be 28.5% by the end of the year, 16% in 2026, and 9% in 2027."

Highlights from Yılmaz's statements are as follows: "The MTP budget process, updated every September with a three-year perspective, is being initiated. Our economic program is being successfully implemented, and we are seeing concrete results. Our fundamental macroeconomic approach has been maintained with determination, and there has been no deviation from our targets. While our economy continues to positively differentiate itself compared to similar countries, it has once again demonstrated its resilience against external shocks. As part of the fight against inflation, an uninterrupted disinflation process has begun as of June 2024, following a transition period. The disinflation process has been maintained with determination, and inflation has decreased by 42.5 points. With improvements in inflation expectations and core trend indicators, we expect the disinflation process to continue uninterrupted in September and throughout the rest of the year.

"SUSTAINABLE GROWTH COMPOSITION MAINTAINED"

As of the first half of 2025, our national income growth has remained moderate at 3.6% as a result of disinflation policies. The increase in domestic demand has been managed in a balanced manner, and the sustainable growth composition has been preserved. The economy has not been allowed to overheat, and the data confirms that we have achieved both disinflation and balanced growth. The low current account deficit, indicating a significant strengthening in our country's external balance outlook, shows that our economy's need for external financing has decreased significantly. This positive outlook will be further reinforced and made permanent with structural steps to be taken for the new MTP period.

"CONFIDENCE IN THE TL HAS INCREASED"

Within the framework of the program we have implemented and predictable policies, confidence in the TL has increased, allowing the Currency Protected Deposit accounts to be concluded healthily without converting to foreign currency deposits or creating any exchange rate pressure. Over the past two years, the increase in confidence in the TL, with the share of TL deposits in total deposits rising from 31.6% to 60.7%, is quite significant in this regard. The share of KKM accounts in total deposits has decreased from 26.2% to 1.7%. With the termination of KKM, we will see that these accounts are completely closed in 2026. The continuous decline in inflation, balanced growth, improvement in the current account deficit, increased confidence in the TL, historically high reserves, declining risk premiums, and the decreasing budget outlook despite the earthquake's impact clearly demonstrate that our economic policies are beginning to produce concrete and permanent results.

"NATIONAL INCOME WILL EXCEED 1.5 TRILLION DOLLARS FOR THE FIRST TIME"

As we complete 2025, we will reach a national income size exceeding 1.5 trillion dollars for the first time as one of the most fundamental performance indicators of our program. By the end of 2025, our country will be the 16th largest economy in the world and the 6th largest in Europe. While creating the 2026-2028 MTP, we built our economic targets on realistic assumptions, taking into account all global trends. One of the main objectives of the MTP is to create a growth path that is compatible with the disinflation process and sustainable. The key point here is that as the disinflation process progresses and our structural transformations are implemented, growth will gradually strengthen.

"WE ARE DRAWING A ROADMAP WITHOUT COMPROMISING GROWTH"

In this context, we aim for growth to reach 3.8% in 2026, 4.3% in 2027, and 5% in 2028. From the first year of the program, we are drawing a roadmap that permanently reduces inflation with tight monetary and fiscal policies while not compromising on growth. In the upcoming period, we will gradually raise our growth potential through transformation steps while reducing inflation to permanently single-digit levels.

"WE AIM TO CREATE 2.5 MILLION ADDITIONAL EMPLOYMENTS IN FOUR YEARS"

We expect the unemployment rate, which is projected to be 8.7% in 2024, to decrease to 8.5% in 2025, 8.4% in 2026, and 8.2% in 2027. By the end of 2028, we aim for the unemployment rate to drop to 7.8%, falling below 8% for the first time in history. During this four-year period, we aim to create approximately 2.5 million additional jobs in our economy, ensuring greater participation of individuals in the labor market and increasing social welfare. We are progressing with a determined and holistic approach in the fight against inflation, which is a fundamental priority for the Turkish economy. We aim for the inflation rate, which is expected to be 44.4% in 2024, to decrease to 28.5% in 2025, 16% in 2026, 9% in 2027, and 8% in 2028, permanently falling to single-digit levels by the end of the program period. This outlook not only marks an important milestone on the path to achieving price stability but also provides a critical ground for protecting the purchasing power of our citizens, ensuring fair income distribution, strengthening economic confidence, and improving the investment environment.

"WE WILL ENSURE A PERMANENT DECLINE IN INFLATION"

In the past two years, we have made significant progress in this direction. The inflation rate, which was 65% in 2023, has decreased to 44% by the end of 2024. We expect this rate to fall below 30% in 2025. The tight, determined, and coordinated monetary and fiscal policies we are implementing towards our single-digit inflation target will continue with the same discipline in the upcoming period. In this context, there will be no compromise on our determination to achieve a permanent decline in inflation and establish price stability. The current account deficit, which was 3.5% of national income in 2023, is expected to decrease to 0.8% in 2024, indicating a significant improvement.

This realization has remained well below our forecast of 1.7% in our program and has provided a positive outlook in terms of external balance. Our expectation for 2025 is that the current account deficit will remain significantly below our program target of 2%, with the ratio of the current account deficit to GDP expected to be 1.4%. During this period, especially the increase in market diversity in exports and the decrease in energy costs have positively contributed to the current balance. The current account deficit to national income ratio is targeted to decrease to 1.3% and 1.2% in 2026 and 2027, respectively. By 2028, this ratio is expected to decrease to 1%. The improvement we will achieve in our current account balance will significantly reduce Turkey's need for external financing and ensure the sustainable management of the external balance. While inflation is expected to be 28.5% by the end of this year, the inflation targets have been set at 16% for next year, 9% for 2027, and 8% for 2028.