##s. medium - term projections distinguished participants, against the backdrop of the economic outlook i have summarized so far, i will share with you our medium - term projections. we updated our assumptions regarding external demand slightly for 2024 and 2025. due to the realizations, we revised our assumptions for crude oil prices downwards for 2024, and broadly preserved them for 2025. we kept our assumption for food prices intact. our medium - term forecasts are based on an outlook in which the tight monetary policy stance will be maintained until a significant and sustained improvement is achieved in the inflation outlook. in addition, our forecasts are based on the assumption that there will be a continuation of economic policy co - ordination. accordingly, we kept the year - end inflation forecasts for 2024, 2025 and 2026 unchanged. we project that inflation will fall to 38 percent at the end of 2024. we kept our forecasts for 2025 and 2026 unchanged at 14 percent and 9 percent, respectively. we target inflation to stabilize at the 5 percent in the medium term. as we approach the year end, the forecast range corresponding to 2024 should have narrowed down mechanically. however, given the mounting uncertainties amid recent geopolitical developments and global financial volatility, we kept the forecast range between 34 percent and 42 percent. when we look at the sources of inflation for the 2024 year - end, we see that the downward and upward effects offset each other. the rebalancing in demand conditions and the slower than anticipated decline in inflation expectations had an upward impact on our forecast by 0. 2 points, each. meanwhile, we calculate the total impact from our turkish lira - denominated import prices and administered price assumptions as - 0. 4 points. as annual inflation had peaked in may, we entered the disinflation period we frequently underlined in our policy communication. inflation will decline significantly in the third quarter owing also to the favorable base effect from the last year. 9 / 10 bis - central bankers'speeches our decisive monetary policy stance will support the downtrend in the monthly underlying inflation amid the rebalancing in domestic demand, the real appreciation in the turkish lira and the improvement in inflation expectations. by maintaining the cautious stance in monetary policy, we envisage that the inflation will decline steadily in the rest of the year. also, we expect that the tightening in financial conditions will lead the rebalancing in demand conditions to be more

survey - based indicators, such as the capacity utilization rate and the pmi, confirm the loss of momentum in the industrial sector. the services production index also saw a limited decline on a quarterly basis as of may. a broad look at the indicators reveals that the decline in production is not as deep as implied by the industrial production index. nevertheless, the decline is in line with the deceleration in demand. accordingly, we assess domestic demand to have slowed down in the second quarter, albeit still remaining at an inflationary level. indicators based on alternative methods reveal that the output gap narrowed in the second quarter. we expect the narrowing to continue in the third quarter as well. here, i would like to emphasize that the rebalancing of domestic demand will continue as a result of our tight monetary policy. the output gap, which will fall to negative levels over the remainder of the year, will be an important component of the disinflation process. we see that the foreign trade balance continues to improve in line with the rebalancing in domestic demand. 3 / 10 bis - central bankers'speeches as a result, we estimate that the ratio of the current account deficit to gdp fell below 2. 5 percent in the second quarter. as of july, we expect the annualized current account deficit to continue its downtrend and fall to around usd 20 billion. as we previously communicated, the current account balance improves during monetary tightening periods. in the upcoming period, we expect the improvement in the current account balance to continue, in line with our tight monetary stance. distinguished participants, in this section of the presentation, i would like to share our assessments of inflation. the annual inflation, which peaked in may, has dropped in the subsequent two months. thus, consumer inflation stood at 61. 8 percent in july, falling within the forecast range projected in the previous inflation report. in addition to annual inflation, we also closely monitor monthly inflation developments. the recent trends in various indicators suggest that the underlying inflation continues to weaken. the underlying inflation, which was 2. 9 percent on average in the last six months, declined to 2. 6 percent in the past three months and to 2. 4 percent in the past two months. the slowdown in the underlying trend of inflation is in line with our projections. in the second quarter, price increases slowed down in all subgroups of the b index, with the weakening in core goods in the lead. in july, the underlying inflation edged up