MEDIUM-TERM PROGRAM ANNOUNCED: YEAR-END INFLATION FORECAST SET AT 28.4 PERCENTAGE, GROWTH TARGET AT 3.3 PERCENTAGE

Vice President Cevdet Yılmaz announced the new Medium-Term Program (OVP), which serves as the economic roadmap. Stating that the program continues to yield concrete results in key areas despite additional external shocks, Yılmaz shared critical targets ranging from defense to social housing, and exports to fighting inflation.

Surge in Defense Investments and Social Housing Resources allocated to priority sectors under the program have been significantly increased. Stating that defense spending will be increased by 229%, Cevdet Yılmaz emphasized that they aim for a Türkiye that develops its own technology, meets its own needs, and generates high added value in the defense industry.

Social housing investments saw a 150% increase. It was reported that the rental social housing projects launched as a pilot in Istanbul will be expanded nationwide during the program period.

Inflation Target: Single Digits by the End of the Program Period Expressing that the core objective of the economic administration is to make price stability permanent, Yılmaz stated that inflation is expected to enter a downward trend again in the last quarter of 2026 and land at 28.4% by the end of the year.

The program projects a gradual decline in the inflation path:

• 2026: 28.4%
• 2027: 21.0%
• 2028: 13.5%
• 2029: 9.0% (Single-digit level)

It was underlined that supply-side policies will be implemented more strongly, particularly in food prices, and fiscal discipline will be resolutely maintained.

Historic Threshold in Per Capita Income: $20,000 In line with macroeconomic targets, the Turkish economy is expected to grow by 3.3% in 2026. Growth is projected to reach 4.2% in 2027, 4.6% in 2028, and 5.0% in 2029.

By the end of the OVP period, the GDP is targeted to rise above $2.2 trillion, and exports of goods and services to $450 billion. By the end of the year, national income is expected to exceed $1.8 trillion for the first time in Republic history, with per capita income also surpassing the $20,000 threshold for the first time.

Budget Deficit and Unemployment Rates Declining Thanks to the measures taken, the budget deficit, previously projected at 3.5% for 2026, is expected to materialize at 3.1%. The current account deficit is forecasted to decline to 1.9% in 2027, 1.8% in 2028, and 1.6% in 2029.

The targets for a gradual decrease in unemployment rates were listed as follows:

• 2026: 8.1%
• 2027: 8.0%
• 2028: 7.8%
• 2029: 7.6%

Comprehensive Support for Manufacturing Industry and Exports A data-driven and target-oriented “Manufacturing Industry Strengthening Program” is being implemented. Stating that commercial diplomacy tools will be utilized more effectively, Yılmaz announced that the share of high-value-added and technology-intensive products in exports will be increased, and export financing will be strengthened by expanding Eximbank support and export insurance opportunities.

Highlighting that confidence in the Turkish Lira has increased, the statement noted that the share of TL deposits in total deposits rose to 61.5%.