The Governor of the Central Bank of the Republic of Turkey (CBRT), Fatih Karahan, cited "war-related developments" as the reason for increasing the 2026 year-end inflation target to 29.5 percent, directing eyes to the inflation figures of the countries in the middle of the war. Data reveal that inflation in many of the countries in direct conflict is well below Türkiye's.
CBRT President Fatih Karahan used the following statements while announcing the year-end inflation forecasts at the last Inflation Report meeting of 2026:
''We updated our 2026 year-end inflation forecast upwards to 29.5 percent. We predict that inflation will stabilize at 5 percent, which is the inflation target in the medium term, after falling to our intermediate targets of 21 percent at the end of 2027, 13.5 percent at the end of 2028, and 9 percent at the end of 2029.
War-related developments were decisive in the update of the forecasts. Continuing uncertainties regarding the course of the war and the expectation that energy prices will remain higher for a longer period compared to the previous report period have affected inflation forecasts upwards.
THE REALITY OF INFLATION IN THE ACTORS OF THE WAR
The recently announced inflation rates in the countries that are at the core of the geopolitical tensions and war that Karahan points out in the increase in inflation are in clear contrast to the CBRT's reasoning:
Israel: In Israel, which is at the center of hot conflicts in the Middle East, the annual inflation rate announced as of September 2026 is only 1.6 percent.
USA: In the USA, which is a global actor and indirect party to conflicts, the official annual rate for October 2026 could not be fully announced due to a technical outage in the October 2025 data. However, looking at the last 11 months of data and the annual rate of 3.7 percent in September 2026, it is seen that inflation continues to remain stable in low single digits.
Russia: In Russia, which has been running a war economy for more than two and a half years and has been subject to heavy economic sanctions from the West, annual inflation was at 6.35 percent as of September 2026.
Ukraine: Even in Ukraine, where the war continues devastatingly and whose industrial and energy infrastructure was heavily damaged by Russian attacks, annual inflation in October 2026 was recorded as 11.0 percent.
Iran: The economic situation in Iran, which is the other front of the tension in the Middle East and has been crushed under international embargoes for years, is quite heavy. As of October 2026, annual inflation was announced as 88.7 percent.
WHOSE INFLATION IS INCREASED BY THE WAR?
CBRT's emphasis on "war and energy prices"; Countries whose economies are shaped by war, destruction and international sanctions (with the exception of Iran) are frustrated by single-digit or low double-digit inflation figures. The current inflation rates of countries such as Ukraine (11.0 percent), where an active war is being waged, and Israel (1.6 percent), which is the trigger of the war, are far from even the optimistic target of 29.5 percent revised by the CBRT for the end of 2026.
So that; Excluding Iran, even the 22.65 percent total reached when the inflation rates of the four warring countries, Israel, the USA, Russia and Ukraine, are stacked on top of each other, remains below the inflation rate of Türkiye alone.
The economic management's approach, which attributes the deviation in inflation to geopolitical risks, is not limited to the CBRT. A similar defense was recorded in the 2027 budget presentation made by the Minister of Treasury and Finance Mehmet Şimşek last week.
In his presentation, Şimşek said, "If geopolitical shocks had not occurred, inflation would have been 7 points lower." However, even when the "7-point geopolitical shock" mentioned by Şimşek is deducted from the latest official inflation rate of 29.77 percent announced by TÜİK, the resulting rate of 22.77 percent still exceeds the total inflation of the four warring countries (22.65 percent).
These emerging data justify the criticism that the deepening inflation problem in Türkiye should be explained by internal structural problems and macroeconomic dynamics rather than global geopolitical developments and external shocks. This striking picture creates a huge illusion that Türkiye is paying the cost of the war rather than the countries at the front.
