Turkey’s annual inflation slows down to 9-month low of 61%
The drop in the second consecutive month was slightly more than the estimates.
ANKARA — Turkey's annual consumer inflation fell 13.75% to a nine-month low of 61.78% in July, from 75.45% in June, according to official data released on Monday, as the country's central bank tightened monetary policy.
"Annual inflation is decreasing. … The decline in inflation will be felt more in the coming period,” Turkish Finance Minister Mehmet Simsek said after the release of data. The drop in the second consecutive month was slightly more than the 62% forecast in a Bloomberg survey of economists.
Annual inflation was driven primarily by rising prices in education, housing and restaurants, data released by the Turkish Statistical Institute showed.
Month-on-month inflation, meanwhile, rose to 3.23% with rising prices in the housing, alcoholic beverages and tobacco group as well as transportation.
“Monthly inflation increased in July due to temporary effects,” Simsek said.
Timothy Ash, senior analyst at BlueBay Asset Management, said the drop shows that the central bank’s monetary policies are working.
“Turkey — headline inflation declined sharply [year-on-year] due to fav[orable] base effects from 71.6% to 61.8% in July, albeit [month-on-month] was high at 3.2%, as expected due to admin price hikes,” he wrote on the X platform.
Following President Recep Tayyip Erdogan’s return to economic orthodoxy after the May 2023 presidential and parliamentary elections, the central bank began aggressively hiking interest rates, raising them from 8.5% to 50% starting in June 2023.
