Türkiye will continue its tight monetary and fiscal policy programme to curb inflation, even as officials remain open to limited adjustments, Vice-President Cevdet Yilmaz said at a briefing with reporters in Istanbul.
“There is no plan to pause our programme,” Yilmaz said. “All programmes are dynamic, and adjustments can always be made.” He added that any refinements would focus on supporting production, investment and exports while keeping domestic consumption under control.
Türkiye has followed restrictive economic policies for more than two years after a period of loose credit that pushed inflation sharply higher and weakened the lira. High borrowing costs have weighed on households and businesses, while price growth has slowed only gradually. Annual inflation currently stands at about 31 per cent.
Yilmaz said the government expects inflation to improve in the first quarter of this year, helping market expectations move toward a year-end level of around 23 per cent. Official projections see inflation falling within a 13 to 19 per cent range by the end of the year and easing to 9 per cent in 2027. The central bank has issued a similar forecast for end-2026.
The vice-president noted that inflation has already dropped by nearly 45 percentage points, even as food prices remained high because of frost and drought affecting agriculture. He said the sector is expected to support economic growth this year while helping limit further price increases.
Yilmaz also stressed that the government does not want inflation to fall too quickly, warning that an abrupt slowdown could damage employment, growth and social stability. “We want a balanced path that protects both price stability and economic activity,” he said.
Türkiye’s current economic framework was introduced in 2023 to restore investor confidence, reduce inflation expectations and strengthen export-driven growth. It also seeks to address long-standing current account pressures by encouraging domestic production.
The central bank raised its policy rate to 50 per cent in 2024 before gradually easing through most of last year, bringing the benchmark rate down to 38 per cent. Some business leaders have questioned whether the focus on inflation alone risks slowing the economy too sharply.
Responding to concerns that lower interest rates could weaken the lira, Yilmaz said real interest rates remain the key factor. “Lowering rates as inflation falls does not affect real rates, so we do not expect such an impact,” he said.
He added that the government plans to strengthen selective support mechanisms for companies while improving overall financial conditions. Officials aim to maintain confidence in the policy direction while keeping room to respond to changing domestic and global conditions.
Yilmaz said the government remains committed to reducing inflation in a sustainable manner, while preserving growth, employment and financial stability as Türkiye continues its economic rebalancing effort.
