ANKARA, Sept. 6 (Xinhua) -- Türkiye has raised its inflation forecasts and lowered growth and tourism revenue projections in a new economic roadmap, as heightened Middle East tensions add uncertainty and complicate efforts to curb still-high inflation.
The Medium-Term Program for 2027-2029, unveiled Sunday by Vice President Cevdet Yilmaz, puts Türkiye's year-end inflation forecast for 2026 at 28.4 percent, up significantly from the previous projection of 16 percent.
The program lowered the 2026 growth projection to 3.3 percent from 3.8 percent, while the tourism revenue forecast was reduced to 65 billion U.S. dollars from 68 billion dollars.
The revisions come against a backdrop of heightened tensions in the Middle East, which have increased uncertainty over energy prices, tourism flows, trade and broader global economic conditions.
"The global economy is entering a new period in which predictability has declined. Geopolitical risks and uncertainties have increased," Yilmaz said at a press conference in Ankara.
Yilmaz stressed that the war in the Middle East involving the United States, Iran and Israel since the end of February was estimated to have added 7 percentage points to inflation this year.
Yet the latest inflation figures indicate that Türkiye's disinflation process has continued despite the more challenging external environment. Annual consumer inflation eased to 31.51 percent in August from 31.75 percent in July, according to the latest official data.
Yilmaz highlighted the progress made since inflation peaked at 75.5 percent in May 2024, saying that it had entered a "marked downward trend" under the policies implemented since then.
For policymakers, the external environment creates an additional layer of uncertainty. Türkiye is heavily dependent on imported energy, meaning a prolonged escalation in the Middle East could feed into domestic costs through energy and transportation prices.
Tourism is another area exposed to regional tensions. The sector is an important source of foreign currency and employment, and weaker international travel to Türkiye could affect both service exports and the country's external balance.
Istanbul-based economist Mustafa Sonmez said the revised targets appeared to recognize that the final stage of disinflation could take longer than previously expected.
"The important point is that the downward trend in inflation has not been reversed despite the geopolitical shock," Sonmez told Xinhua. "But maintaining that trend will become more difficult if energy and transportation costs remain volatile," he said.
Analysts said the revised growth forecast also reflects the balance policymakers face between continuing to bring down inflation and maintaining economic activity.
Senol Babuscu, a finance expert and scholar at Ankara's Baskent University, said the new program should be viewed against the wider external environment.
"Geopolitical developments will be one of the key variables for Türkiye's economy in the coming months," Babuscu told Xinhua. "Energy prices, tourism and the exchange rate could all be affected, making the disinflation process more sensitive to external shocks," he warned. ■
