Türkiye's Annual Inflation Drops to 9-Month Low at 61.78%
Türkiye's annual consumer inflation rate decreased to 61.78% in July, marking the second consecutive month of decline, according to data from the Turkish Statistical Institute (TurkStat). This represents a significant drop from 71.60% in June and the highest annual rate recorded this year, 75.45% in May. The decline in inflation is largely attributed to base effects and comes amid broader efforts by the Central Bank of the Republic of Türkiye (CBRT) to control price growth.
Despite the overall decrease, different sectors experienced varying levels of price increases. Education saw the highest annual inflation rate at 104.50%, while clothing and footwear had the lowest at 39.75%. Monthly consumer prices increased by 3.23% from June, exceeding analysts' expectations. The central bank has raised its policy interest rate by 4,150 basis points since June of the previous year and continues to monitor inflation risks closely. The current benchmark interest rate remains at 50%.
Finance Minister Mehmet Simsek indicated that the reduction in inflation should become more noticeable in the coming months. However, the country continues to face challenges with rising costs in essential sectors such as education, housing, and utilities. The central bank has maintained a restrictive monetary policy stance to mitigate inflationary pressures, although there are concerns about potential political interference from President Recep Tayyip Erdogan.
