GDANSK: The Organisation for Economic Co-operation and Development (OECD) on Wednesday sharply raised its 2026 and 2027 inflation forecasts for Turkey, while also cutting its economic growth projections for both years.
In its latest economic outlook, the OECD raised its headline inflation forecast for Turkey to 31.5percent for 2026 from 28.4percent in June, placing it above Turkish authorities’ latest projections. Its inflation projection for 2027 was also raised to 24.7percent from 18.3percent.
It also cut Turkey’s economic growth forecast to 2.7percent from 3.1percent in 2026, and to 3.6percent from 3.8percent in 2027. The latest revision marks the OECD’s third downgrade of Turkey’s growth outlook this year.
A large energy importer, Turkey has grappled with some of the world’s highest inflation levels in recent years, with annual inflation peaking at 85.5percent in late 2022 and surging again to above 70percent in May 2024 before starting a sustained decline following aggressive central bank tightening.
While energy and fertiliser costs remain a headwind, the OECD said it expects inflation in Turkey to keep moderating, with disinflation set to continue into 2027.
In June, the OECD had cut its 2026 growth forecast for Turkey, citing weaker domestic demand amid high energy and commodity prices and tighter financial conditions, while leaving its 2027 growth outlook unchanged.
The revisions come as the OECD slightly raised its global growth forecasts for this year, saying AI-driven investment is helping the world economy hold up better than expected, even as a more entrenched energy shock weighs on the outlook for 2027.
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