Newsletters
Annual inflation in Türkiye declined to 31.5% in August, with monthly price growth at 1.8%, official data showed Thursday, extending the disinflation momentum regained three months ago.
The numbers are broadly in line with market expectations and follow a July reading in which annual inflation slowed to 31.8%, while monthly inflation was recorded at around 1.8%.
Among the main price categories, transportation costs rose 4.8% month-on-month, while housing, water, electricity, gas and other fuels increased 2.3%.
Renewed pressure from elevated oil prices pushed the monthly increase in energy costs to 5.5%, up from 2.3% a month earlier.
However, seasonal factors continued to contain food prices, with monthly growth slowing further to 0.2%, while a 3.9% decline in clothing and footwear prices also helped offset some of the pressure.
Core inflation, which excludes energy, food and non-alcoholic beverages, alcoholic beverages, tobacco and gold, also came in at 1.8% monthly, rising slightly to 30.1% annually.
Producer inflation, meanwhile, rose around 2.6% during the month and 28% annually, driven by a 6% monthly increase in electricity and gas production and distribution prices.
The figures came as a key indicator for the Central Bank of the Republic of Türkiye (CBRT) ahead of its Monetary Policy Committee (MPC) meeting on Sept. 10, in which the bank is expected to hold its policy rate at 37% after four consecutive meetings.
The bank returned to one-week repo auctions in late August after a six-month halt, effectively normalizing funding conditions toward the policy rate from the costlier 40% overnight rate.
Policymakers also raised their 2026 year-end inflation forecast by 2 percentage points in their latest Inflation Report in August, lifting it to 28% from 26% and citing mounting risks from higher energy prices.
Market expectations for the next phase of monetary easing remain divided, with several major institutions expecting the CBRT to keep rates unchanged in September before potentially resuming cuts later in the year.
Morgan Stanley expects the central bank to hold in September and deliver cuts in October and December, while JPMorgan also expects 100-basis-point reductions at both meetings, taking the year-end policy rate to 35%.
Bank of America similarly expects the CBRT to leave its benchmark unchanged on Sept. 10 before cutting by 100 basis points in October, while ING sees the policy rate moving toward 35% in the fourth quarter.
Set as preferred source
Set as preferred source
1 min read
1 min read
