OVP 2027-2029 Draft Unveiled: Charting Turkey's Economic Course

Vice President Cevdet Yılmaz outlined the 2027‑2029 Medium-Term Program (OVP) draft, slated for public release on September 6, after intensive consultations with business leaders and civil society representatives.

Strategic Blueprint: The Three‑Year Economic Roadmap

The OVP consolidates Turkey's macro‑economic targets, fiscal policy stance, and structural reforms into a single framework for the next three years. The draft sets explicit thresholds for inflation, unemployment, budget deficit, and public debt.

Key Takeaways from Stakeholder Consultations

■Business associations called for accelerated tax reforms and enhanced investment incentives.

■Civil society groups emphasized sustainable growth and strengthening of the social safety net.

■Industry leaders highlighted public‑private partnerships for digital transformation and green energy projects.

■Coordination between the Ministry of Treasury and Finance and the Strategy and Budget Presidency was underscored as essential for implementation credibility.

Anticipated Market Reactions

■The Turkish lira could gain stability as the OVP provides a clearer policy horizon, potentially reducing FX volatility.

■In the bond market, demand for long‑dated sovereign bonds may rise, with a modest uptick in interest‑rate swap expectations.

■Borsa Istanbul (BIST) indices might experience sector rotation and heightened liquidity inflows as investors price in a more favorable investment climate.

■Swap markets are likely to see tightening of swap spreads and a re‑pricing of risk premiums.

Seda Çetin – Market Pricing & Data Terminal Manager: "The unveiling of the OVP serves as a stabilising signal for Turkey's macro‑economic outlook. HFT algorithms will initially focus on narrowing interest‑rate swap spreads and a slight contraction in TL liquidity. Long‑term sovereign bonds should attract demand backed by a clear inflation target and fiscal discipline. However, the pace of reform implementation and resilience to external shocks will remain the primary drivers of market volatility. Consequently, risk teams should integrate OVP policy parameters into their scenario analyses to navigate the evolving landscape effectively."