Why Turkey struggles to control inflation
Turkey is facing difficulties in controlling inflation due to energy price fluctuations and geopolitical repercussions. The Turkish Central Bank has raised its inflation forecast for the end of 2026 to 28%, up from an earlier projection of 26%. This adjustment reflects increasing inflationary pressures resulting from Iran's ongoing conflict, geopolitical uncertainty, and the rising cost of oil and natural gas—which Turkey imports at rates of up to 83% for oil and 90% for natural gas—along with an import bill nearing $60 to $70 billion annually. Despite the Central Bank's measures, such as maintaining interest rates at 37%, persistent inflation, which reached 31.75% in July 2024, keeps living costs high. Citizens are suffering from rising prices, especially for food, with inflation rates expected to reach 30% by the end of the year amid ongoing geopolitical tensions and the war's impact on the Turkish economy.
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