In its third Inflation Report of the year, the CBRT raised its 2026 year-end forecast from 26% to 28%. What it means for rent increases and mortgage planning.
Governor Fatih Karahan of the Central Bank of the Republic of Türkiye (CBRT) announced the year's third Inflation Report on 13 August 2026. According to the report, the CBRT's 2026 year-end inflation forecast was raised from 26% to 28%.
Forecasts and interim targets
- 2026 year-end forecast: 28% (previous report: 26%)
- 2026 interim target: 24% (unchanged)
- 2027 year-end: 15%
- 2028 year-end: 9%
- Medium-term target: 5%
The CBRT stated that diesel prices and refinery margins, natural gas and non-energy commodity prices, food price assumptions and adjustments in administered and managed prices were influential in the upward revision. The 2026 food inflation forecast was also raised from 26.3% to 28.5%.
In his presentation, Karahan stressed that the tight monetary policy stance would be maintained and that all tools would continue to be used resolutely for price stability.
Reading it from the housing market's point of view
Rent increases: The annual increase in ongoing rental contracts is limited by the 12-month average of CPI. If inflation runs higher than expected until year-end, this may slow the pace at which that average comes down. In other words, the decline in the rent increase cap may be slower than previously calculated. This is a forecast; the exact rate is set each month with TÜİK data.
Mortgages: The CBRT says it ties its rate decisions to the realized and expected course of inflation. The raising of the inflation forecast requires buyers who are planning on an expectation of a quick fall in loan rates to also test their payment plans at the current rate level.
Price and yield: In a high-inflation environment, it is important to look at the real value of nominal figures when forming sale price and rent expectations. Even if a home's price rises on an annual basis, if the rise stays below inflation, there may be a real loss in value.
What should be watched from here?
- The monthly CPI data TÜİK announces at the start of each month and the rent increase cap tied to it,
- The CBRT Monetary Policy Committee's rate decisions,
- The CBRT's monthly House Price Index and New Tenant Rent Index.
The difference between forecast and target
The "interim target" in the report refers to the level the CBRT aims to reach within its policy framework; the "forecast" refers to the outcome expected under current conditions. The forecast for 2026 (28%) is 4 points above the interim target (24%). For 2027, the forecast and the interim target are at the same level (15%). For households making budget and payment plans, it is more useful to look at the direction in which forecasts are updated rather than at a single figure.
Karahan said that demand conditions support disinflation but that a slowdown in the disinflation process has been seen in recent months.
The CBRT is expected to announce its next Inflation Report in the last quarter of the year; forecasts may be updated again according to new data.
