The Executive Board of the International Monetary Fund (IMF) has concluded its 2025 Article IV consultation with Türkiye, noting significant progress in the country’s disinflation program. The assessment comes as investors closely watch emerging market economies for signs of stability and growth.
According to a statement released on February 13, 2026, inflation has fallen from 49.4 percent year-over-year in September 2024 to 30.9 percent in December 2025, driven by strong fiscal consolidation, prudent income policies, and a tight monetary stance.
“Türkiye’s Disinflation Program Has Shown Successes”
“Since the 2024 Article IV consultation, Türkiye’s disinflation program has shown successes,” the IMF stated. This progress is a key development for the Turkish economy, which has faced significant inflationary pressures in recent years.
The IMF estimates that Türkiye’s gross domestic product (GDP) grew by 4.1 percent in 2025, following a temporary slowdown in the middle of 2024. The organization projects continued robust growth, forecasting a 4.2 percent expansion in 2026.
Demand for the Turkish lira has strengthened, supporting international reserves and ensuring adequate financing of the current account deficit, the IMF added.
Tight Monetary Policy Expected to Support Disinflation
The IMF expects a tight monetary policy, moderate wage increases, and an overall neutral fiscal policy to continue supporting gradual disinflation. “The current policy mix continues to balance disinflation with stable growth,” the organization noted.
The end-of-year inflation for 2026 is projected to be 23 percent, with growth expected to reach 4.2 percent in 2026, driven by further reductions in the policy rate and increased confidence.
The current account deficit is expected to remain adequately financed, with confidence among depositors and strong gold prices helping to maintain reserve levels around 80 percent of the IMF’s adequacy metric.
While growth is expected to remain solid and inflation is projected to decline, the IMF cautioned that this approach carries risks and costs. External risks remain high due to ongoing uncertainty in global trade and regional conflicts.
An adverse shock, such as a rise in energy prices or adverse weather events, could prolong the period of high inflation. The gradual approach to disinflation may also negatively affect the financial sector and leisurely productivity growth.
Emphasis on Bold Structural Reforms
The IMF Executive Board’s assessment also highlighted the require for ambitious structural reforms. The Board commended authorities for the significant achievements of Türkiye’s disinflation policies, noting that they have reduced macroeconomic imbalances, boosted confidence, and supported strong growth.
However, the IMF emphasized that inflation remains above target and the economy is vulnerable to shocks. To solidify disinflation, strengthen external buffers, and support inclusive medium-term growth, a tighter macroeconomic policy mix and ambitious structural reforms are necessary.
Authorities were also commended for their strong fiscal efforts in the previous year, and the IMF stressed the importance of continuing fiscal consolidation to support disinflation. Expanding the tax base and improving compliance are crucial, as is further rationalizing expenditures through the gradual removal of energy subsidies.
As fiscal space expands, additional resources could be directed towards social priorities. The IMF also supported aligning wage policies fully with inflation targets and strengthening oversight of state-owned enterprises.
Financial Sector Maintains Soundness
The IMF called for a continued tight monetary policy to ensure a stable disinflation process, while emphasizing that adjustments to the policy rate should be data-dependent and consider macrofinancial impacts.
The importance of central bank independence and clear communication was also underscored, with a recommendation to limit foreign exchange interventions to smoothing volatility and gradually allow for greater exchange rate flexibility as inflation expectations become better anchored and reserve buffers recover.
The IMF noted that the financial sector has maintained its soundness thanks to the swift and effective intervention of the authorities in response to market stress.
Continued vigilance regarding high foreign currency liquidity risks is necessary, and the IMF supported ongoing efforts to strengthen supervisory and resolution frameworks.
The IMF called for structural reforms to boost productivity, resilience, and medium-term growth, prioritizing areas such as [details omitted as not provided in source].
Economic Forecasts
Looking ahead, the IMF projects Türkiye’s economy to grow by 4.1 percent in 2027 and 4 percent per year from 2028 to 2031.
The unemployment rate is forecast to be 8.3 percent in 2026, 8.7 percent the following year, and 9.1 percent from 2028 to 2031. Inflation is expected to fall to 19 percent next year and then to 15 percent by 2031.
The current account deficit is projected to remain at 1.4 percent of GDP from 2026 to 2028 and 1.5 percent of GDP from 2029 to 2031. You can locate more information about the IMF’s assessment of Türkiye’s economy here.
