Türkiye’s Finance Sector Sees Inflation Staying Above 30% as Dollar Forecast Rises

Bosphorus News Economy Desk

Türkiye's non-bank finance sector expects inflation to remain above 30% at the end of 2026, while its dollar/TL forecast has also moved higher, according to the May 2026 Economic Outlook Index published by the Financial Institutions Association.

The Financial Institutions Association, known by its Turkish acronym FKB, represents Türkiye's non-bank financial institutions, including leasing, factoring, financing, asset management and savings finance companies.

The survey placed the 2026 year-end inflation expectation at 31.71%, up from 30.54% in the previous month. The 2027 year-end inflation expectation stood at 23.72%, suggesting that finance-sector respondents still expect inflation to ease next year, but not quickly enough to restore a low-inflation environment.

The dollar/TL forecast also rose. Respondents put the 2026 year-end exchange-rate expectation at 52.08, compared with 51.82 in the previous survey. The May-end dollar/TL expectation was 45.77.

The interest-rate outlook remains tight. The expected short-term commercial loan rate was 46.73%, while the average rate expectation for FKB member companies stood at 52.56%.

The credit-risk picture was the clearest warning in the survey. Sixty-three percent of respondents said they expected non-performing loan ratios to rise in the coming period, linking high funding costs, currency pressure and inflation expectations directly to balance-sheet risk.

Growth expectations, however, did not collapse. Respondents put Türkiye's 2026 growth expectation at 3.26% and the 2027 expectation at 3.65%. Over the next three months, 55% of participants expected transaction volumes to increase, while 37% expected no change and 8% expected a decline.

The data points to a finance sector still pricing in activity, but with less confidence in a smooth disinflation path. Higher inflation expectations, a stronger dollar forecast and rising concern over non-performing loans suggest that Türkiye's non-bank financial institutions are preparing for growth under tighter margins and heavier credit risk.

***Source: TC Lira, "Finans sektöründe dolar ve enflasyon beklentisi yükseldi"

https://tclira.com/finans-sektorunde-dolar-ve-enflasyon-beklentisi-yukseldi/