Turkey’s 2026-2028 Medium-Term Economic Programme: Stability or Balancing Act?
Turkey has announced its new medium-term economic programme, laying out plans for 2026 to 2028. The roadmap comes at a time when the country is still fighting high inflation, coping with fiscal pressures, and navigating global financial risks. The key question is whether this plan can bring stability and steady growth, or whether it will simply be a delicate balancing act.
What’s in the numbers?
The government projects growth of 3.8% in 2026, 4.3% in 2027, and 5% in 2028. Inflation, which is still around 30% today, is expected to fall to 16% next year, then to single digits by 2027-28. Unemployment is forecast to ease slowly, from about 8.5% to under 8%.
The budget deficit, which widened after the 2023 earthquake, is planned to narrow to 2.8% of GDP by 2028. Exports are targeted to rise toward USD 274 billion in 2025, while tourism revenues are expected to climb from USD 64 billion to around USD 75 billion. The current account deficit is projected to shrink close to –1% of GDP.
These goals show a preference for slower, steadier growth instead of chasing rapid expansion. The priority is clear: bring down inflation first, then build stable growth on firmer ground.
Reforms behind the plan
Beyond the figures, the programme highlights reforms. Authorities aim to strengthen financial institutions, deepen capital markets, and set up more transparent inflation policies. Green and digital transformation is another focus, with investments in renewable energy, digitalisation, and technology-driven industries. Agriculture modernisation and stronger support for exports and tourism are also on the agenda.
If these reforms succeed, officials believe they could add about half a percentage point to potential GDP growth in the coming years.
The challenges
Yet the risks are significant. Inflation inertia is still strong, and bringing prices down will require consistent policies without sudden reversals. Global energy prices, commodity costs, and investor sentiment remain outside Ankara’s control, and they could quickly widen the current account deficit.
At home, the government will need to reduce the budget deficit while still meeting public demands for social spending, especially in the wake of natural disasters. Structural reforms are often hard to push through, and political stability will be key to keeping markets confident.
Why it matters for people and markets
For households, the pain of high inflation will not disappear overnight. Wages and savings will only feel relief if disinflation targets hold over the next two years. Businesses may benefit from clearer forecasts and support for exports, though tight credit conditions could limit short-term demand. Investors are watching whether Turkey can stay on a consistent path — single-digit inflation, credible reforms, and predictable policy signals could all help attract more foreign capital.
Looking ahead
The new medium-term economic programme of Turkey is ambitious but not unrealistic. It signals that Turkey is prioritising stability, inflation control, and reforms over quick growth fixes. The next few years will test whether these goals can be achieved without derailing recovery or weakening social welfare.
The key questions are simple: Can Turkey tame inflation without stalling growth? Will reforms be carried out fully, not just on paper? And how will the country weather global shocks that could threaten stability?
If the answers turn out positive, this plan could be the foundation for sustainable and inclusive prosperity.
