Market participants revise Turkish inflation forecasts higher and anticipate gradual rate cuts, signaling doubts over disinflation and Lira stability.
Turkey’s market participants have raised year-end inflation forecasts to 29.2% for 2026 and 23.7% for 2027, up from the central bank’s revised projections of 28% and 15%, respectively. The shift reflects growing skepticism about sustained disinflation and currency stability amid elevated price pressures.
Expectations for the central bank’s policy rate have also softened, with respondents anticipating a decline to 35% by year-end from the current effective 40%. This implies a 500-basis-point easing cycle, despite persistent inflation concerns.
While market forecasts for USD/TRY at year-end remain slightly more optimistic than Commerzbank’s estimate, one-year-ahead projections align at 56.0, underscoring limited confidence in the Lira’s stability.