Annual inflation hits 44-month low, at 33.5 percent in July
ANKARA
The annual inflation rate in Türkiye was 33.5 percent in July, down from 35.05 percent in June, below the market expectation of around 34 percent.
The July rate is the lowest since November 2021, when it was 21.31 percent, official figures from the Turkish Statistical Institute (TÜİK) showed Aug. 4.
The monthly inflation rate was 2.06 percent in July, up from 1.37 percent in June.
Finance Minister Mehmet Şimşek hailed the latest numbers, which showed that inflation eased to its lowest level in 44 months.
In a post on X, Şimşek noted that monthly inflation ticked up in July due to temporary and seasonal effects.
“The disinflation process is progressing in line with our targets. We anticipate that inflation will fall within the Central Bank’s forecast range by the end of the year,” Şimşek wrote.
The decline in inflation will enhance predictability, contributing to further improvement in domestic financial conditions and the investment environment, he added.
“We will continue to implement our program with determination to achieve our primary goal of permanent price stability,” Şimşek said.
The highest price hikes were seen in education with 75.5 percent, housing 62.01 percent, and health 37.49 percent on a yearly basis, according to TÜİK data.
Lowest rates were posted in clothing and footwear with a 10.67 percent increase, communications 19.62 percent, and transport 26.57 percent.
Eyes on the Central Bank
With July’s figures showing further decline in the annual inflation rate, attention now shifts to the Central Bank, which has recently pivoted back toward an easing cycle.
The bank cut its benchmark interest rate — the one-week repo auction rate — by 300 basis points from 46 percent to 43 percent on July 24, 2025, exceeding the consensus expectation of a 250 basis point reduction.
The bank’s Monetary Policy Committee (MPC) also lowered the overnight lending rate from 49 percent to 46 percent and the overnight borrowing rate from 44.5 percent to 41.5 percent.
In its statement accompanying the rate decision, the bank said that the tight monetary policy stance, which will be maintained until price stability is achieved, will support the disinflation process through moderation in domestic demand, real appreciation in the Turkish Lira and improvement in inflation expectations.
The next rate-setting meeting is scheduled for Sept. 11, with additional meetings planned for Oct. 23 and Dec. 11.
