Türkiye Economic Outlook. September 2026

Tighter global financial conditions and persistent inflation pressures require a prudent policy mix. We expect monetary policy to stay restrictive, with historically high real rates and continued macroprudential measures, while fiscal and credit support is likely to be selective.

Key points

• Key points:
• Global growth remains resilient despite persistent headwinds, but geopolitical tensions, supply disruptions, and tighter financial conditions keep uncertainty elevated. Inflation is expected to stay under pressure in the short term, with policy rates higher for longer.
• Türkiye’s GDP growth slowed to 2.5% y/y in 1H26, while activity is expected to remain moderate in the near term, keeping output below potential. We maintain our 3% growth forecast for 2026, with risks slightly to the downside, before growth accelerates to 3.5-4% in 2027.
• We keep our 2026 year-end inflation forecast at 30%, with risks slightly tilted to the upside. Strong inertia, higher energy prices and unanchored expectations require high real rates for longer, supported by macroprudential measures to preserve tight monetary conditions.
• Dollarization pressures remain contained, while strong reserve buffers are key to absorbing potential shocks and supporting financial stability. We maintain our view of a 1.5–2% m/m nominal depreciation pace in USDTRY, requiring ex-post real rates of at least 4–5% in the short term.
• We expect fiscal and quasi-fiscal support to be selective through social transfers, subsidized credit packages and income policies. Higher energy prices weigh on the external balance, although resilient tourism and exports and softer domestic demand provide some offset.

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