Prices continue to fall in Turkey, where inflation continued to decline for the 12th consecutive month, standing at 35.41% in May after reaching 37.86% in April, confirming the disinflation process and opening the door to further interest rate cuts by the Turkish Central Bank (TCMB).
According to the report presented in the last hours by the Turkish Statistical Institute (TÜİK), the Consumer Price Index (CPI) was 35.41% in May reaching its lowest level since November 2021, below the markets’ forecasts, which had anticipated that the year-on-year inflation would be around 36.1% in May.
The largest price increases compared with a year ago were recorded in education, where costs rose 71.67%, followed by housing (67.43%) and health (40.12%), data from Turkey’s official statistics agency show. On the other hand, the lowest price rises were in clothing and footwear (14.12%), communications (19.25%) and transport (24.59%).
The good data on the evolution of prices in Turkey have led analysts and markets to anticipate a possible new rate cut by the Central Bank, causing the main banking index to rise by 5.3% on the stock market in the last few hours and triggering general rises in the stock market of around 2.5%.
Turkey’s Minister of Economy and Finance, Mehmet Şimşek, recalled that inflation has been reduced in the last 12 months by 40%, while service prices fell by 45% to 51.2%. ‘This is the lowest inflation rate seen since June 2022,’ Şimşek stressed.
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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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