Mid-Term Program: Turkey’s 2027‑2029 Economic Roadmap and Market Implications

The Mid‑Term Program (OVP), crafted jointly by the Presidency Strategy and Budget Presidency and the Ministry of Treasury and Finance, outlines a comprehensive macro‑economic framework for the 2027‑2029 horizon.

Growth Outlook: Targeting 3.8%‑5% Annual Expansion

■Projected growth of 3.8% in 2026, 4.3% in 2027, and 5% in 2028.

■Realised expansion is expected to boost Financial Market Indices and Equity Performance.

■Growth targets will be underpinned by infrastructure spending and a Structural Reform Package.

Inflation and Employment: Two Pillars on the Downward Path

■Inflation forecasted at 16% for 2026, easing to 9% in 2027 and 8% in 2028.

■Unemployment aims at 8.4% (2026), 8.2% (2027) and 7.8% (2028).

■A softer inflation environment should curb USD/TRY volatility and lift interest‑rate swap expectations for lower rates.

Trade Balance Strategy: Closing the Export‑Import Gap

■Export targets: $282 bn (2026), $294 bn (2027), $308.5 bn (2028).

■Import forecasts: $378 bn (2026), $393 bn (2027), $410.5 bn (2028).

■Narrowing the trade deficit may ease pressure on FX rates and FX swap markets.

Fiscal Gap and Debt Management: Sustainable Fiscal Architecture

■Budget deficit as a share of GDP projected at 3.5% in 2026, tightening to 2.8% by the program’s end.

■This trajectory could lower risk premiums in bond markets and compress credit spreads.

Seda Çetin – Market Pricing & Data Terminal Manager: The OVP rollout will trigger HFT algorithms to recalibrate interest‑rate swap and FX forward exposures. The anticipated rapid drop in inflation should compress short‑term TL‑linked swap spreads and dampen volatility in USD‑TRY futures. Improved fiscal balances are likely to boost demand for Turkish Treasury Bills (TCMB), nudging yields marginally lower. Market participants must monitor implementation timelines closely and adjust risk models accordingly.