Turkey’s government expects inflation to fall to around 20% by the end of the year, Vice President Cevdet Yilmaz said on February 1, amid easing in recent months and ahead of this year’s first reading.

“We are trying to heal the wounds from the 2023 earthquake. Throughout this process, we are continuing our fight against inflation, which we consider the most fundamental problem,” Yilmaz said at a meeting with businessmen in the eastern province of Ardahan.

“We finished last year with 44%. We see that January this year will be lower compared to January last year. We estimate this. This will continue to pull inflation down. When we get to the end of the year, we expect inflation to come down to about 20%,” he said.

“We are also focused on single-digit figures in the perspective of 2026-2027,” he added.

The vice president’s remarks came ahead of official January inflation data due on February 3. Recent polls show that the fall in annual inflation is likely to continue, while monthly inflation will increase due to a minimum wage increase and price adjustments at the start of the new year.

Fitch Ratings, in its latest assessment of the Turkish economy on January 31, said it expects the Turkish central bank to “maintain a tight monetary stance to support deflation through macroprudential measures”.

It also stated that it expects the central bank to cut its discount rate to 28% by the end of 2025.

Noting that employment in the country continues to grow, Yilmaz said: “Last year, our exports reached $262 billion. Yesterday it was announced that our tourism revenue exceeded $61 billion. On the other hand, our imports have decreased. Thus, our current account deficit has decreased.”

Meanwhile, on January 31, Fitch affirmed Turkey’s credit rating at ‘BB-‘ with a ‘stable’ outlook.

Fitch estimated that Turkey’s gross domestic product (GDP) growth slowed to 2.9% in 2024 and forecast moderate growth of 2.6% in 2025 due to tight monetary policy, fiscal consolidation, and a modest increase in the minimum wage.

The agency reported that external reserves showed improvement, with international reserves rising by $14 billion to $155 billion in 2024.

However, it also warned that “a rapid easing of monetary policy or abandonment of the current policy stance, which is not our baseline scenario, could reignite inflationary pressures.”

“ Positive real interest rates, a low current account deficit, and capital inflows are likely to contribute to the durability of the improvement in external buffers. Consequently, we forecast Turkey to maintain reserve coverage broadly in line with its peers as reserves rise to $175 billion by 2026.”