Turkey's annual inflation rate recorded a greater-than-expected decline in July, reaching 33.52%, compared to 35.05% in June, according to official data released on Monday by the Turkish Statistical Institute, reflecting the continued trend of slowing prices despite rising costs in some vital sectors.
The data showed that the monthly inflation rate stood at 2.06%, which is lower than the expectations of a Reuters survey that indicated an increase of 2.4%. Monthly inflation was 1.37% in June, suggesting that inflationary pressures remain relatively under control, despite increases in sectors such as housing and education.
The slowdown in inflation rates came despite rising fuel and tobacco prices in mid-year, along with an increase in natural gas prices. Transportation prices saw a monthly increase of 2.89%, while alcoholic beverages and tobacco prices surged by 5.69%, and housing prices rose by 5.78%.
Additionally, the domestic producer price index rose by 1.73% month-on-month, recording an annual increase of 24.19%, reflecting ongoing cost pressures for producers.
Markets expect the inflation rate to drop to 29.75% by the end of the year, a level higher than the central bank's projections of 24%. In contrast, Finance Minister Mehmet Şimşek stated that this decline in inflation is in line with the established goals, emphasizing that the government will continue to implement its economic program aimed at achieving price stability.
It is noted that the Central Bank of Turkey decided on July 24 to cut the key interest rate by 300 basis points, resuming its monetary easing policy, and indicated at that time that some temporary factors might slightly raise monthly inflation in July.
