BofA Lifts Turkey 2026 Inflation Outlook to 30% After April CPI Hits 32.4%

Context Turkey’s annual inflation accelerated to 32.4% in April, driven by a 12% month‑on‑month jump in energy prices as oil markets reacted to the Iran conflict. Food inflation also rose to 3.7%, adding broad‑based pressure. The lira weakened 1.1% against the dollar to 32.40 TRY/USD, while the BIST 100 index slipped 0.4% to 9,850 points. Bank of America Corp (BAC) shares edged up 0.6% to $34.20, leaving its market cap near $340 billion.

Key Facts BofA revised its 2026 inflation outlook for Turkey from 28.5% to 30%. The April CPI print of 32.4% exceeded the forecasted 3.1% monthly rise, with energy costs the main catalyst. The bank projects inflation to peak near 33% in May before easing to about 31% by August. Despite the uptick, the Central Bank of the Republic of Turkey kept its policy rate unchanged at 37% and signaled that funding costs will remain at the overnight rate of 40% through September, reflecting tight liquidity conditions.

What It Means Higher funding costs relative to the policy rate suggest the central bank is prioritizing inflation control over growth, keeping real borrowing expenses elevated. This stance could weigh on credit‑sensitive sectors such as construction and autos, while exporters may benefit from a weaker lira. Investors should watch for any shift in the CBRT’s forward guidance and for changes in global oil prices, which directly feed Turkey’s energy‑driven inflation.

Watch next: the May inflation release and the CBRT’s June policy meeting for signals on when funding costs might converge toward the 37% policy rate.