Turkey’s annual inflation slows to 33.52 per cent in July

Turkish annual consumer price inflation dipped more than expected to 33.52 per cent in July, official data showed on Monday, sustaining a downward trend despite strong rises in housing and education sector prices.

Month-on-month, inflation was 2.06 per cent, the Turkish Statistical Institute said, below forecasts. In June, CPI inflation was 1.37 per cent monthly and 35.05 per cent annually.

In a Reuters poll, the monthly inflation rate was expected to be 2.4 per cent in July, with the annual rate seen at 34.05 per cent.

On July 24, the central bank cut its policy rate by 300 basis points and relaunched an easing cycle, while saying that leading indicators suggest a temporary rise in monthly inflation in July due to month-specific factors.

A mid-year hike in fuel and tobacco prices as well as a rise in natural gas prices had been expected to drive monthly inflation. Transport prices rose 2.89 per cent month-on-month and alcoholic drinks and tobacco prices rose 5.69 per cent. Housing prices were up 5.78 per cent.

The domestic producer price index rose 1.73 per cent month-on-month in July for an annual rise of 24.19 per cent, the data showed.

Inflation is seen dropping to 29.75 per cent at the end of this year according to the poll median, higher than the central bank forecast of 24 per cent.

Finance Minister Mehmet Simsek said that the disinflation is in line with targets and that year-end inflation will be within the central bank’s forecast range.

“We will continue to resolutely implement our program to achieve lasting price stability, our primary priority,” Simsek also said in a post on X.