Türkiye Inflation Dips More than Expected to Near 31%

04/12/2025 07:13 AST

Turkish inflation eased to 31.07% annually and 0.87% month-on-month in November, both below expectations due to food prices, official data showed on Monday, reinforcing expectations of another interest rate cut next week.

A Reuters poll had forecast annual inflation of 31.6% and a monthly rise of 1.25%.

The monthly figure was depressed by food prices, especially vegetables and fruits, while housing, transportation and entertainment continued to elevate the headline index.

On an annual basis, increases in housing, education and services were prominent, according to the Turkish Statistical Institute.

In October, consumer prices rose 2.55% month-on-month and 32.87% year-on-year. The central bank slowed its easing cycle last month with a 100-basis-point rate cut that brought its policy rate to 39.5%.

Inflation readings were above expectations in August and September but below forecasts in October and November, reinforcing views that the disinflation path is regaining momentum.

Unprocessed food prices drove the better than expected inflation, Oyak Securities said in a client note, adding it responded by lowering its year-end inflation forecast to 31.3%.

Oyak predicted a rate cut of 200 basis points next week.

The central bank's end-2025 inflation target stands at 24%, with its forecast range at 31-33%. Markets are watching the bank's final policy meeting of the year for signals on the pace of future easing, with the main rate now at 39.5%.

Last week, the central bank said preliminary data pointed to an improvement in November inflation and reiterated that it would adjust policy as needed to meet its targets, despite a slowdown in the expected disinflation trend earlier in the autumn.

Finance Minister Mehmet Simsek said annual inflation fell to the lowest level in four years, adding that he expected the moderate trend in monthly inflation to continue in December.

The data also showed the domestic producer price index rose 0.84% month-on-month in November, bringing annual PPI inflation to 27.23%.

Asharq Al Awsat