Consumer prices rose by 2.96% m/m in February, bringing annual inflation to 31.5% and marking a pause in disinflation. The recent energy price shock and persistent price pressures create upside risks to our 25% year-end forecast, though higher real rates and a potential fuel pricing mechanism could help limit these risks.

The Turkish economy grew by 3.4% y/y in 4Q25, bringing full-year 2025 GDP growth to 3.6%, slightly below our 3.7% forecast. While tighter financial conditions might pose downside risks -depending on the duration and the scope of the conflict in Iran- we maintain our 2026 GDP growth forecast at 4% for the time being.