Türkiye Plans Single-Digit Inflation, Slower Growth Through 2028

Turkey's government has unveiled a new Medium-Term Program (MTP) prioritizing the reduction of inflation over rapid economic growth, projecting inflation to fall from 28.5% in 2025 to single digits by 2027, and economic growth to slow to 3.3% in 2025 before rebounding to 5% by 2028. The program reflects a policy shift from prior ambitions, with GDP growth forecasts for 2025 and 2026 lowered from 4% and 4.5% to 3.3% and 3.8%, respectively, emphasizing macroeconomic stability, fiscal discipline, and structural reforms to support sustainable growth. Vice President Cevdet Yılmaz highlighted the government's commitment to disinflation and maintaining a floating exchange rate with limited interventions to curb volatility. Treasury and Finance Minister Mehmet Şimşek dismissed concerns about political developments affecting the economy. The roadmap also includes reforms to boost digitalization, high-value-added industries, agricultural efficiency, and green transformation, with potential GDP growth expected to increase by 0.5% due to these reforms. Despite easing inflation trends, analysts expect cautious monetary policy adjustments, with the Central Bank of Türkiye likely to limit rate cuts to prevent inflationary pressures from worsening.