Turkey Inflation Eases More Than Expected

The annual inflation rate in Turkey eased to 31.51% in August 2026 from 31.75% in July, slowing for a third consecutive month and below the expected 31.62%. This marked the lowest reading since March, as inflation moderated for food and non-alcoholic beverages (33.79% vs 37.53% in July) and housing and utilities (39.77% vs 40.32%). Price growth also slowed for clothing and footwear (13.16% vs 16.48%), health (43.46% vs 43.89%), restaurants and accommodation services (31.16% vs 31.65%), and insurance and financial services (25.08% vs 25.64%). In contrast, inflation accelerated for transport (35.08% vs 30.83%), alcoholic beverages and tobacco (30.42% vs 29.38%), and recreation, sports and culture (23.43% vs 23.36%). On a monthly basis, CPI grew 1.84%, the most since May, following a 1.78% gain in July but below the forecast 1.93% increase. Meanwhile, core inflation picked up to a three-month high of 30.07% from 29.91% in July.

The annual inflation rate eased to 31.75% in July 2026 from 32.11% in June, slightly below market expectations of 31.8%. It marked the lowest reading since March, as price growth slowed particularly for housing and utilities (40.32% vs 45.14% in June), transport (30.83% vs 31.15%), and alcoholic beverages and tobacco (29.38% vs 34.15%). In contrast, inflation accelerated for food and non-alcoholic beverages (37.53% vs 35.45%), clothing and footwear (16.48% vs 14.18%), and furniture and household goods (22.41% vs 22.32%). Despite easing inflation, Middle East-driven energy price volatility is expected to keep the central bank cautious, given the country’s reliance on energy imports. The monetary authority suspended repo funding in March and shifted to its costlier 40% overnight rate, with economists seeing limited scope for rate cuts this year. On a monthly basis, consumer prices rose to a three-month high of 1.78% from 0.99% in June, though slightly below market forecasts of 1.83%.

The annual inflation rate eased to 32.11% in June 2026 from 32.61% in the previous month, in line with market expectations. This marked the lowest level since March, driven by slower price increases in housing (45.14% vs. 45.59% in May) and transportation (31.15% vs. 34.29%). Cost increases also moderated across several categories, including furniture and household goods (22.32% vs. 22.36%), health (33.62% vs. 32.94%), education (46.10% vs. 50.06%), and information and communication (25.57% vs. 25.58%). In contrast, inflation continued to rise for food and non-alcoholic beverages (35.45% vs. 34.86%), and restaurants and accommodation services (31.61% vs. 31.59%). The softer inflation reading reinforces expectations that the central bank could resume its easing cycle after keeping monetary conditions tight since March. On a monthly basis, consumer prices eased by 0.99% in June from a 1.71% increase in May and marking the smallest gain in six months.