Inflation and current account deficit alarm in the new MTP: Growth target may be revised downward
The Medium-Term Program (MTP), which will cover the 2027-2029 period, is expected to update key indicators including inflation, the current account deficit, and growth.
12punto
The government's new Medium-Term Program (MTP), covering the 2027-2029 period, is expected to be announced tomorrow. The program will include new targets for key macroeconomic indicators such as inflation, growth, unemployment, the current account deficit, exports, and imports.
The MTP, prepared under the coordination of the Presidency's Strategy and Budget Directorate and the Ministry of Treasury and Finance, is expected to include revisions to certain targets, particularly for the end of 2026. The gap between the targets announced last year and current expectations is most prominent in the inflation and current account deficit items.
According to a report by DW Türkçe, the growth forecast for 2026 was set at 3.8 percent in the previous MTP. It is stated that this rate could be lowered to 3.1 percent in the new program. On the current account deficit side, a target of 22.3 billion dollars was announced last year for the end of 2026. In the August results of the Central Bank's Survey of Market Participants, the year-end current account deficit expectation rose to 50.2 billion dollars.
A similar picture is drawing attention on the inflation front. In last year's MTP, the inflation target for the end of 2026 was announced as 16 percent. However, the fact that inflation has been hovering in the 31-33 percent band for about a year has strengthened the expectation that this target could also be updated in the new program.
The program is also expected to set out the policy framework regarding public finance, budget balance, expenditure ceilings for public administrations, and priority reform areas. Ahead of the new MTP, the business world is calling for changes to practices that it states are straining industrialists and exporters within the scope of the fight against inflation.
Prof. Dr. Aziz Konukman stated that if the MTP targets are not met, the government should share the reasons with the public, saying, “Almost every year, the targets set in the previous year's MTP are not met. However, the government does not provide a defense as to why the targets were not met; it only replaces the missed targets with updated figures.”
Prof. Dr. Sinan Alçın also stated that updates to the inflation and current account deficit targets, particularly for the end of 2026, are expected in the new MTP.