Turkey: Inflation drops to nine month-low in July
Inflation came in at 61.8% in July, which was down from June’s 71.6%. July’s figure marked the lowest inflation rate since October 2023 and was broadly in line with markets expectations. Looking at the details of the release, price pressures for transport, hospitality and textile products eased, while housing and utilities prices rose at a quicker pace in July.
The trend pointed up, with annual average inflation coming in at 65.9% in July (June: 65.1%). Meanwhile, core inflation fell to 60.2% in July from June’s 71.4%.
Finally, consumer prices rose 3.23% from the previous month in July, accelerating from June’s 1.64% increase due to adjustments in administered prices and taxes.
Our panelists expect inflation to decline further through year-end due to a high base of comparison and the lagged effects of prior monetary tightening.
Muhammet Mercan, chief economist at ING, commented on the outlook:
“The downtrend in annual inflation will likely continue with another pronounced drop in August. The extent of the decline will be determined by administrative price adjustments as we saw at the beginning of this month. A 38% increase in natural [gas] prices is expected to have a direct and indirect impact of around 1ppt on the headline rate.”