Türkiye unveils 3-year plan to slash inflation to single digits

Türkiye's government has unveiled a three-year economic roadmap targeting a reduction in annual consumer inflation from the current 31.51% to single-digit levels by 2029, pledging to maintain tight coordination between monetary, fiscal and revenue policies to break persistent inflationary cycles.

Inflation trajectory and monetary framework

The Medium-Term Program covering 2027 through 2029 projects annual consumer inflation will fall to 28.4% by the end of this year before declining further to 21% in 2027, 13.5% in 2028, and 9% by the close of 2029, according to the official document released by Ankara. The disinflation strategy relies on maintaining the Central Bank of the Republic of Türkiye's inflation-targeting framework alongside a floating exchange rate regime that allows market forces to determine currency values without intervention.

Supply-side measures and price-setting reforms

Authorities plan to deploy all monetary tools to cool domestic demand while simultaneously strengthening supply-side policies to enhance market competition and ease price pressures. The program specifically aims to alter how businesses formulate price expectations, urging companies to base future pricing on government inflation targets rather than automatically adjusting for past inflation rates that currently drive retail markups. State purchase prices for agricultural crops will be set according to public finance impacts and market dynamics rather than historical inflation, with production plans tailored to regional potential to ensure long-term food security.

Transparency and expectation management

Officials intend to reinforce communication channels to better anchor inflation expectations within the stated targets while improving public access to pricing information. A dedicated website displaying prices at supermarket chains will receive increased promotion to enhance transparency and empower consumers, the program document noted. The Central Bank will maintain its current policy stance and monetary tools throughout the three-year period to ensure the uninterrupted continuation of the disinflation process.