April 7, 2026
U.S. investment bank JPMorgan has revised its outlook for Turkey, warning that rising energy prices could push inflation higher and keep interest rates elevated for longer than previously expected.
Energy Prices Driving Inflation Risks
In its latest report, JPMorgan noted that although recent inflation data came in below expectations, this slowdown may prove temporary. The bank emphasized that rising energy costs—driven largely by geopolitical tensions in the Middle East—are expected to put renewed upward pressure on prices in the coming months.
As a result, JPMorgan increased its year-end inflation forecast for 2026 to 28%, up from 26.4%.
Higher Interest Rate Expectations
Reflecting these inflation concerns, the bank also revised its monetary policy outlook. JPMorgan now expects Turkey’s policy rate to remain higher for longer, raising its year-end policy rate forecast to 34%, from a previous estimate of 32%.
The report suggests that the Central Bank of the Republic of Türkiye may continue tightening in the near term. JPMorgan forecasts a potential rate hike from 37% to 40% at the upcoming April meeting, before any easing cycle begins later in the year.
Delayed Rate Cuts
According to the bank, interest rate cuts are unlikely to start immediately. Instead, JPMorgan expects the central bank to begin easing only around mid-year, possibly in July, with gradual reductions thereafter.
Inflation Outlook Remains Uncertain
Despite a recent decline in annual inflation—falling to around 30.9%—JPMorgan cautioned that the improvement may not be sustained. The bank highlighted that energy-driven cost pressures could reverse the downward trend in inflation, especially in the second half of the year.
Broader Economic Implications
The report underscores the growing role of external factors, particularly energy markets and geopolitical developments, in shaping Turkey’s economic outlook. Persistently high inflation could force policymakers to maintain tight monetary conditions, potentially weighing on growth and financial conditions.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök