The fall in prices seems to continue for the second consecutive month in Turkey, where the CPI fell by a sharp 10 points in July from the previous month to 61.78%, even though the cost of education, housing and restaurants continues rising in the Eurasian country. Despite the good news, high inflation remains one of the main problems of the Turkish economy and a major concern for Turks.
According to the latest data released today by the Turkish Statistical Institute (TÜİK), the CPI in Turkey fell to 61.78% in July compared to 71.6% in June or 75.4% in May. This is the biggest fall in inflation in almost two years, and the figure is also lower than economists’ forecasts, as most experts had expected July’s CPI to exceed 62%.
Despite the general decline in year-on-year inflation, prices seem to continue rising in certain specific sectors, with education (104.5% year-on-year increase), housing (98.48%) and hotels and restaurants (76.04%) standing out. Housing also grew the most compared to the previous month (8.08%), followed by alcohol and tobacco (5.84%); on the opposite side, the largest monthly price fall was recorded by clothing and footwear (-2.58%). Core inflation – which eliminates the most volatile factors such as food or energy – also showed a significant reduction and stood at 60.2%.
Commenting on the latest CPI data, Turkish Finance Minister Mehmet Şimşek insisted that the “positive results” achieved are the consequence of the economic programme implemented by the government, “whose main objective is disinflation“. As part of this policy, the Turkish Central Bank kept interest rates unchanged at 50% for the fourth consecutive month in July, expecting the inflation rate to fall to 38% by the end of the year thanks to high rates, moderating domestic demand and the stability of the Turkish lira.
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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.
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