BofA Raises Türkiye 2026 Inflation Forecast to 30% After April Spike to 32.4%

Türkiye’s inflation accelerated to 32.4% year‑on‑year in April, with monthly price growth of 4.2% versus the expected 3.1%. The surge was led by a 12% month‑on‑month rise in energy prices, while food inflation climbed to 3.7%. Broadening price pressures and higher oil costs linked to the Iran conflict have pushed underlying inflation upward, making it harder for the Central Bank of the Republic of Türkiye (CBRT) to begin easing.

BofA’s revised 2026 forecast now stands at 30%, up from the prior 28.5% estimate. The bank projects inflation will peak near 33% in May before easing to about 31% by August. It also forecasts that the CBRT will keep overnight funding costs at 40%—the effective rate above the 37% policy rate—through September, while holding the policy rate steady.

Market reaction showed the USD/TRY exchange rate up 0.8% in April, reflecting lira weakness, and the BIST 100 index (XU100) down 1.2% after the inflation release. Bank of America (NYSE: BAC) holds a market capitalization of roughly $300 billion, underscoring the weight of its outlook on global investors. The gap between funding costs and the policy rate signals continued tight liquidity conditions for Turkish banks.

The outlook suggests the CBRT may delay any rate cuts until inflation shows a sustained decline and exchange‑rate stability improves. Investors will watch the May inflation print, the CBRT’s June policy meeting, and oil price trends for signals on when funding costs might converge toward the policy rate.