Inflation in Turkey stood at 32.61% year-over-year in May, according to a report released on June 5 by the Turkish Statistical Institute (TÜİK). The figure, which exceeded market expectations, confirms the rise in prices caused by the impact of the war between the United States and Iran in the Middle East.
According to data provided in the TÜİK report, the Consumer Price Index (CPI) rose 32.6% compared to the same month last year and recorded a monthly increase of 1.71%, after inflation stood at around 32.4% in April. Compared to December of last year, the cumulative increase reached 16.61%. The figures exceed analysts’ forecasts, as most market surveys pointed to a monthly inflation of 1.63% and an annual CPI rate of 32.50%.
Among the expenditure groups with the greatest weight in the index, food and non-alcoholic beverages saw their costs rise by 34.86% in May compared to the same month in 2025; meanwhile, transportation prices rose by 34.29%, while housing, water, electricity, and gas recorded an annual increase of 45.59%.
In monthly terms, prices for food and non-alcoholic beverages fell by 0.48% in May, subtracting 0.12 percentage points from the index’s monthly change. Similarly, transportation costs rose by 2.03% compared to the previous month, while expenses related to housing, water, electricity, gas, and other fuels increased by 2.28%.
Energy prices are putting pressure on inflation
Turkey’s Minister of Treasury and Finance, Mehmet Şimşek, stated on social media while commenting on the latest inflation data that “although geopolitical risks and the volatility of energy prices continue to put pressure on the inflation outlook, we have limited these effects with the measures we have adopted.”
“We will continue to implement our policies in line with our goal of achieving sustainable price stability,” added Şimşek, who noted, however, that food prices fell by 0.5% month-over-month thanks to improved weather conditions and that annual inflation for services improved by 10.1 percentage points.
Rising CPI slows interest rate cuts
Following the release of May’s inflation data, market attention is now focused on next week’s meeting of the Monetary Policy Committee of the Turkish Central Bank, where the central bank will decide on interest rates in Turkey.
The uncertainty generated by the conflict in the Middle East has led markets to temper their expectations regarding further rate cuts, so most analysts now expect Turkey’s benchmark interest rate, currently set at 37%, to remain unchanged at both the Committee meeting scheduled for June 11 and the subsequent meeting on July 23, although a possible 100-basis-point cut in interest rates in Türkiye is anticipated for September.
In fact, the Central Bank raised its inflation forecast for Turkey by the end of the year last month to 24%, up from the previous estimate of 16%, and noted that the short-term inflationary effects stemming from the war with Iran will remain “pronounced” due to rising energy costs, which poses a problem for countries dependent on energy imports, such as Turkey.
VOTE
EDITORIAL TEAM
🧿 About us
.
Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
…
📣 Your ADVERTISING on Hispanatolia
.
🤗 HELP US WITH A DONATION:
💗 Paypal
