Karahan’s 2026 Inflation Report: Tight Policy, Disinflation in Services, and Rising Food Pressures

The Central Bank of Turkey’s president, Fatih Karahan, unveiled the 2026 Inflation Report, signaling a steadfast stance amid lingering shocks.

Core Climate Shift

Karahan highlighted that disinflation in the services sector continues despite supply shocks, underscoring the limited impact of tight monetary policy on inflation.

Monetary Policy Stance

■The policy stance will be maintained for the remainder of 2026.

■All tools will continue to be employed.

Food Prices and Geopolitical Drag

■Food inflation has shown a pronounced negative divergence.

■Geopolitical developments will be closely monitored for their impact on inflation and current account balance.

Global Growth and Energy Volatility

■Global growth is expected to lose momentum in 2026.

■Oil prices remain high and volatile.

■Expectations of tighter global monetary policy are rising.

Current Account and Risk Assessment

■There are upward risks to the current account.

■Demand conditions are expected to support the maintenance of a disinflationary stance.

Karahan’s remarks reinforce short‑term market stability expectations while indicating that long‑term pressure from food price volatility and geopolitical uncertainty could intensify inflationary risks. With policy stance unchanged, fluctuations in consumer price indices and oil price volatility may reshape investors’ risk perception.