ISTANBUL: Turkey has raised its year-end inflation forecast to 28.4 percent, Vice President Cevdet Yilmaz said on Sunday when he unveiled the country's medium-term economic programme for 2027-2029.
"We expect inflation to start declining again in the fourth quarter of 2026 and to reach 28.4 percent by the end of the year," Yilmaz said in a televised address.
The new forecast is significantly higher than previous projections.
In last year's medium-term programme covering 2026-2028, the government had forecast year-end inflation at 16 percent.
Under the new programme, inflation is projected to fall to 21 percent in 2027, 13.5 percent in 2028 and nine percent in 2029.
Turkey's annual inflation rate eased to 31.51 percent in August from 31.75 percent in July, according to official data.
Yilmaz said the war in the Middle East had played a key role in the upward revision of the inflation outlook.
"According to our central bank, the direct and indirect effects of the war on inflation have been estimated at approximately seven percentage points," he said.
Annual inflation, which has remained above 30 percent since December 2021, peaked at more than 75 percent in May 2024 before beginning to slow.
Yilmaz said the government had made "significant progress in combating inflation", which remains the top priority of its economic programme.
"Inflation, which had risen to 75.5 percent in May 2024, has begun to show a clear downward trend as a result of the policies we have implemented," he said.