Türkiye’s Economic Outlook: Inflation, Growth, and Currency

The government of the Republic of Türkiye has released its annual medium-term economic program, outlining its strategy to combat inflation and manage economic growth. The plan projects a gradual decline in inflation, targeting a drop to 28.5% this year, 16% in 2026, and finally reaching single digits in 2027—a year later than previously anticipated.

Growth Policies and Currency

The economic forecast includes a period of slower growth, with a projected 3.3% increase in 2025. This deceleration is a direct result of the country’s tight monetary policy, which is expected to help bring inflation under control before growth rebounds to around 5% in 2028. A key element of this strategy is a floating currency regime, though authorities maintain they will intervene to smooth out “extreme” fluctuations in the exchange rate. As of today, the Turkish lira has been trading at approximately 41.26 per U.S. dollar, continuing a trend of depreciation that has seen its value fall by over 21% in the past year.

Additional Projections

The program also outlined several other economic targets, including an increase in tourism revenue from $64 billion this year to $75 billion by 2028, and a rise in exports from $273.8 billion to $308.5 billion over the same period. The unemployment rate is forecast to remain at 8.5% for the next two years, and the current account deficit is expected to narrow from $22.6 billion in 2025 to $18.5 billion in 2028.

These projections reflect the Republic of Türkiye’s ongoing effort to stabilize its economy after a years-long crisis marked by soaring prices and a devaluing currency. Since mid-2023, the country has shifted its economic policy, implementing significant interest rate hikes before beginning an easing cycle in July. This change in direction has been crucial in the government’s pursuit of a more stable economic future.