The global economy remains unstable but is faring better than expected. In Türkiye, we maintain our baseline with somewhat a restrictive policy mix in the short term; yet with a balance of risks evolving to a stickier inflation trend due to the prolonged process with more muted gains on expectations.

Our baseline scenario assumes the continuation of the restrictive policies prioritizing disinflation in the short term. Global financial volatility affecting demand for EM assets, Trump policies particularly impacting Europe, and increasing domestic unknowns are near term risks on the Turkish economy, keeping us cautious.