Summary of the Monetary Policy Committee Meeting (2026-42)

Summary of the Monetary Policy Committee Meeting

1.    As a result of the growing uncertainty amid geopolitical developments, energy prices remain elevated and volatile. The duration and extent of uncertainties regarding energy supply, supply chains, and transport costs will continue to be decisive for the future trajectory of energy prices. Meanwhile, agricultural commodity prices are also on the rise due to adverse weather conditions and geopolitical developments. This emerges as another upside risk factor for inflation developments and expectations. 

2.    Due to geopolitical developments, the negative growth outlook for the Middle East and Africa for 2026 persists. On the other hand, growth rates are expected to recover in 2027, supported by favorable base effects. Accordingly, the weak and fragile outlook is expected to continue globally, and the global growth index, which is weighted by the export shares of Türkiye’s foreign trade partners, is projected to increase annually by 1.6% and 2.5% for 2026 and for 2027, respectively.

3.    Due to the volatility in commodity prices, upside risks to global inflation persist. While central banks remain vigilant about these risks, they also take into account the unfavorable effects of these developments on growth and employment. The policy rate pricing suggests that expectations of rate hikes have been maintained in advanced economies. The persistence of the supply shock caused by geopolitical developments along with adverse global weather conditions driven by climate phenomena such as El Niño and the degree to which it will disrupt inflation expectations are key considerations for the course of global monetary policy. Recently, increased uncertainty and fluctuations in risk appetite have led to capital outflows from emerging stock markets, with downside risks to portfolio flows remaining elevated at the same time.