The last Inflation Report meeting of the year started at the CBRT: First messages from Karahan
Increased shocks arising from geopolitical developments limit the decline in headline inflation
Quick Look
- CBRT President Fatih Karahan said that the improvement in the main trend of inflation has become evident at the 2026 year-end Inflation Report meeting.
- He stated that the archive shocks arising from geopolitical developments limited the decline in headline inflation and kept the upside risks alive.
- The 2026 year-end inflation forecast was increased from 26 percent to 28 percent.
AI-generated summary
Why It Matters
At the third Inflation Report meeting of the year held in August, the CBRT updated its 2026 year-end inflation forecast upwards, citing energy costs. The bank increased its 2026 year-end inflation forecast from 26 percent to 28 percent. Karahan announced at the same meeting that they envisaged inflation to decrease to 15 percent by the end of 2027 and to 9 percent by the end of 2028, and to stabilize at the 5 percent target in the medium term.
Fatih Karahan, Governor of the Central Bank of the Republic of Turkey (CBRT), is making a presentation at the last Inflation Report meeting of 2026.
Speaking at the "Inflation Report 2026-IV" presentation, Karahan said that the latest data indicate that the improvement in the main trend of inflation has become evident. Karahan stated that they found the slowdown in services inflation, which had shown high inertia in the past, important, and that upward shocks caused by geopolitical developments limited the decline in headline inflation.
'IMPROVEMENT IN THE MAIN TREND OF INFLATION HAS BECOME OBSERVED'
Karahan made the following assessment regarding the inflation outlook in his presentation:
"Recent data indicate that the improvement in the underlying trend of inflation has become evident. We find the slowdown in services inflation in items that have exhibited high inertia in the past important."
DRAW ATTENTION TO GEOPOLITICAL DEVELOPMENTS
CBRT President Karahan stated that the arch shocks arising from geopolitical developments limited the decline in inflation.
Karahan said, "Upside shocks caused by geopolitical developments limit the decline in headline inflation. The continuation of this situation keeps the upside risks regarding the inflation outlook alive and requires a cautious stance."
THE ESTIMATE WAS INCREASED AT THE PREVIOUS MEETING
At the third Inflation Report meeting of the year held in August, the CBRT updated its 2026 year-end inflation forecast upwards, citing energy costs.
The bank increased its 2026 year-end inflation forecast from 26 percent to 28 percent.
Karahan announced at the same meeting that they envisaged inflation to decrease to 15 percent by the end of 2027 and to 9 percent by the end of 2028, and to stabilize at the 5 percent target in the medium term.
What to Watch
AI outlook — possibilities, not facts
CBRT will maintain a prudent monetary policy stance
Likely · Short term
Open Questions
- Whether a new inflation forecast update will be made at the 2026 year-end Inflation Report meeting
- Duration of geopolitical shocks and how long their impact will last
