CEEMEA Blog: Türkiye (CBT): inflation report – reset under mounting cost pressures

Research evidence excerpt

CEEMEA Blog: Türkiye (CBT): inflation report – reset under mounting cost pressures

15 May 2026

CEEMEA Blog

Macro narrative: weak activity, cost-push pressures on inflation

n Activity: The growth backdrop remains soft. Capacity utilisation is below

historical averages, card spending points to weaker domestic demand in

1Q, and declining consumer goods imports—driven by lower vehicle sales

—confirm the slowdown. The output gap remains in disinflationary

territory.

n Inflation: Communication is balanced. While food and energy continue to

drive near-term volatility, core inflation follows a more moderate trend.

Services inflation—particularly rent and education—is showing signs of

easing, supporting disinflation. Food prices were one of the key drivers of

upside surprises on inflation YTD, although vegetable prices are expected

to normalize in May.

n External balance: The current account deficit remains below its historical

average, despite a widening in 1Q driven by energy imports. Lower gold

imports helped contain the deterioration, but higher energy prices and

geopolitical risks are likely to keep pressure on the trade balance in coming

quarters.

n Risks: Inflation expectations remain a key downside risk, having

deteriorated somewhat amid elevated food prices and geopolitical

developments. The CBT also emphasises the risk of second-round effects,

particularly through energy, transportation and broader cost channels.

Q&A: flexibility retained, tightening bias preserved

The Q&A session highlighted a data-dependent and flexible policy approach. The

current corridor-based framework—where the upper band acts as the effective

policy rate—is seen as appropriate under uncertainty. The Governor highlighted