Deutsche Bank Updates Inflation and Interest Rate Forecasts for Turkey

The renowned investment bank Deutsche Bank has revised its forecasts for Turkey, increasing the expected year-end inflation rate for 2026 to 30%. Additionally, the bank predicts that the policy interest rate will rise to 36%. According to Deutsche Bank's analysis, the Central Bank of the Republic of Turkey's (TCMB) decision to maintain the policy interest rate was largely due to rising global geopolitical tensions and increasing energy costs. The analysis assesses the impact of global energy market developments on inflation. It notes that the significant increase in Brent crude oil prices, approximately 35% in a short period, combined with tax adjustments on fuel, led to higher gasoline and diesel prices. This, in turn, added around 1.5 percentage points to inflation forecasts. In light of these assessments, Deutsche Bank has adjusted its previously announced year-end inflation forecast for 2026 from 28.5% to 30% and its policy interest rate expectation from 35% to 36%.