Business
Turkey Raises 2026 Inflation Forecast to 28.4% as Middle East War Hits Outlook
Turkey has raised its forecast for year-end inflation, with the government citing the economic impact of the ongoing conflict in the Middle East as a major factor behind the revision.
Vice President Cevdet Yilmaz announced on Sunday that inflation is now expected to reach 28.4% by the end of 2026. He made the announcement while presenting Turkey’s medium-term economic programme for 2027-2029.
“We expect inflation to start declining again in the fourth quarter of 2026 and to reach 28.4% by the end of the year,” Yilmaz said in a televised address.
The new projection represents a significant increase from the government’s previous target. Under last year’s medium-term programme for 2026-2028, officials had forecast year-end inflation at 16%.
The latest programme projects inflation will continue to decline after 2026, reaching 21% in 2027, 13.5% in 2028 and 9% in 2029.
Official figures showed Turkey’s annual inflation rate eased slightly to 31.51% in August from 31.75% in July. Despite the recent decline, inflation remains substantially above the government’s revised year-end target.
Yilmaz attributed much of the change in the outlook to the effects of the war in the Middle East, which has disrupted regional trade and contributed to increased economic uncertainty.
“According to our central bank, the direct and indirect effects of the war on inflation have been estimated at approximately seven percentage points,” he said.
Turkey has been battling elevated inflation for several years. Annual inflation has remained above 30% since December 2021, while the rate reached a peak of more than 75% in May 2024 before beginning a gradual decline.
The government continues to identify bringing inflation under control as the central objective of its economic programme.
Yilmaz said authorities had made significant progress through the policies introduced to address price pressures, pointing to the decline from the peak recorded in 2024.
“Inflation, which had risen to 75.5% in May 2024, has begun to show a clear downward trend as a result of the policies we have implemented,” he said.
The revised forecast highlights the challenges facing Turkey as it attempts to sustain disinflation while dealing with external shocks.
Officials are nevertheless maintaining their longer-term objective of bringing inflation into single digits by 2029. The government expects the rate to fall below 30% during 2026 and continue declining over the following three years as economic policies take effect.
The new medium-term programme will guide Turkey’s economic policy through 2029, with inflation control remaining a key priority as authorities seek greater price stability and stronger economic conditions.
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Binance Faces EU Regulatory Scrutiny Over Continued Service to Customers
European regulators are examining how Binance continues to serve customers in the European Union after the cryptocurrency exchange failed to obtain a licence under the bloc’s Markets in Crypto-Assets Regulation, according to a Financial Times report.
The scrutiny centres on Binance’s use of the “reverse solicitation” exemption, which allows companies based outside the EU to provide certain services to customers when those customers approach the company entirely on their own initiative.
Binance was expected to take steps to wind down its European operations after failing to secure a MiCA authorisation by the summer deadline. Under the rules, companies without the required licence were expected from July 1 to limit their activities to helping customers transfer or sell their existing crypto holdings.
The European Securities and Markets Authority and regulators in countries including France, Germany and Greece are examining Binance’s use of the exemption, the Financial Times reported, citing people familiar with the matter.
Some regulators have reportedly requested information from Binance and could consider enforcement measures, including fines, if they are not satisfied with the company’s responses. The review also extends to other cryptocurrency businesses using the same exemption.
ESMA told the Financial Times that reverse solicitation is intended to be a limited exception and should not be used to avoid MiCA requirements. The Dutch financial markets regulator AFM similarly said crypto asset service providers must meet specific requirements before relying on the exemption.
Binance’s local licences in countries including France, Spain and Poland lapsed under the new EU framework. Customers in some other EU markets are served through Binance’s Abu Dhabi entity, which has been regulated since December 2025.
The exchange said its European operations remain compliant with applicable rules.
“In Europe, Binance remains committed to operating on a long-term, compliant basis under the EU’s Markets in Crypto-Assets Regulation. We are actively working toward becoming MiCA-authorised,” a Binance spokesperson told Euronews.
ESMA declined to comment on the specific case when contacted by Euronews. It said supervision, investigation and enforcement under MiCA are responsibilities of national authorities, while ESMA’s role includes promoting consistent supervision across EU markets through cooperation, information-sharing and guidance.
Any enforcement action against Binance would therefore need to be taken by the relevant national regulators rather than ESMA itself.
The latest scrutiny adds to Binance’s regulatory challenges in several major markets. In 2023, the company agreed to pay $4.3 billion in penalties in the United States after pleading guilty to criminal charges linked to money laundering and violations of US sanctions.
The outcome of the EU review could affect Binance’s ability to continue serving European customers while it seeks authorisation under MiCA. The exchange has said it intends to obtain the required licence and operate in the bloc on a long-term basis.
Business
Air France-KLM and Lufthansa Submit Final Bids for TAP Stake
Air France-KLM and Lufthansa submitted their final bids on Wednesday for a stake in Portuguese airline TAP Air Portugal, bringing the bidding stage of the privatisation process to an end and leaving the next decision with the Portuguese government.
The two airline groups are competing to acquire an initial 44.9% stake in TAP. Their final proposals are expected to include improvements to the binding offers submitted in July, according to Parpública, Portugal’s state shareholding manager.
Parpública said it will now prepare a report assessing the changes proposed by the two bidders. The report will examine the overall merits of the final offers before being sent to the government ministers responsible for finance and air transport.
Wednesday was the deadline established by the Portuguese government for the submission of the final proposals. Infrastructure and Housing Minister Miguel Pinto Luz said earlier this week that the government would have 15 days to take a position after receiving the bids.
The proposals will be assessed on financial and strategic commitments, including investment plans, fleet development, maintenance operations, sustainable aviation fuels and compliance with labour obligations.
Air France-KLM said it had submitted a final proposal for a shareholding of up to 49.9% in TAP, signalling its continued interest in expanding its position in the Portuguese airline.
Air France-KLM Chief Executive Benjamin Smith said the group had strengthened its proposal during the final bidding period and described it as a long-term strategic plan for TAP.
The group said its proposal would place Lisbon at the centre of its operations in Southern Europe and focus on expanding connectivity, creating jobs and generating economic value in Portugal.
Lufthansa also said its final proposal was based on its experience developing network airlines and its plans to support TAP’s growth and competitiveness.
The German airline group said it aimed to help strengthen TAP’s position as Portugal’s national carrier while supporting its future development.
The privatisation process has included the possibility of negotiations to allow bidders to improve their proposals before a preferred investor is selected. The eventual transaction will still require several formal approvals.
The sale is expected to require approval by Portugal’s Council of Ministers, as well as clearance from European competition authorities before it can be completed.
The government is seeking to sell 44.9% of TAP initially, while a further 5% of the airline’s shares is reserved for employees. Any portion of that employee allocation that is not subscribed could subsequently be acquired by the investor selected by the government.
The final bids mark the latest stage in Portugal’s effort to bring a strategic airline investor into TAP following the company’s restructuring and return to financial stability. The government will now review the competing proposals before deciding on the next stage of the process.
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