Türkiye aims to reach single-digit inflation with 3-year economic plan

Türkiye’s new Medium-Term Program (MTP) aims to resolve persistently high inflation and reach single-digit levels through the disinflation process.

The economic plan covering 2027-2029 aims to break inflationary inertia and achieve price stability by reducing the inflation rate to single-digit levels through the uninterrupted continuation of the disinflation process.

Türkiye’s annual consumer inflation rate is at 31.51% as of August, prompting Ankara to prioritize the disinflation process driven by coordination of monetary, fiscal, and revenue policies to be maintained throughout the three-year period.

The economic roadmap projects annual consumer inflation to end this year at 28.4% before falling to 21% in 2027, 13.5% in 2028, and 9% by the end of 2029.

Türkiye’s Central Bank (CBRT) will maintain its framework targeting inflation and a floating exchange rate regime to allow free market supply and demand to dictate currency values.

The plan is to utilize all monetary tools to cool domestic demand while strengthening supply policies to promote broader market competition.

The program aims to change how businesses set their prices by urging them to base their expectations on future government targets instead of adjusting prices to match past inflation, in an attempt to break the cycle of continuous retail hikes.

The plan also outlines that state purchase prices for crops will be determined by their impact on public finances and market dynamics to prevent indexation to past inflation rates, while specially tailoring agricultural production to seize regional potential to ensure long-term food security.

Communication channels will be strengthened to anchor inflation expectations within targets, while public awareness of a website for viewing prices at supermarket chains will be raised to increase transparency.