CBRT raises 2026 inflation forecast to 29.5%, widens credit growth limits

The Central Bank of the Republic of Türkiye (CBRT) raised its end-2026 inflation forecast to 29.5% from 28% in its Inflation Report. The 2027 forecast was raised to 21% from 15%, and the 2028 forecast to 13.5% from 9%. With this step, the CBRT formally acknowledged for the first time in a long while that inflation will not fall to single-digit levels within two years.

CBRT Governor Fatih Karahan said, "The disinflation process continues, although it has lost momentum. A pause in the decline in inflation in November is possible." While it was recalled that the official inflation rate currently stands at 29.77%, it was seen that the CBRT revised its end-2026 forecast at each Inflation Report meeting this year, to 18%, 26%, 28% and 29.5% respectively. Rising energy prices due to geopolitical tensions were cited as the justification for the forecast increase.

Credit growth limits were also widened at the same meeting. The 8-week growth limit on consumer and vehicle loans was raised to 3.5% from 3%, on lira loans extended to SMEs to 5.5% from 5%, and on non-SME business loans to 2.5% from 2%.

Prof. Dr. Senol Babuscu, former Deputy General Manager of Ziraat Bankası, commented on the regulation with the words, "Monetary expansion is beginning... This means an election is near." Gokhan Isil, an economist and associate professor at Marmara University, said that a "limited decline" could be expected in consumer loan rates, and that the same expectation applies to SME loan rates.