Annual inflation in Turkey stood at 30.65% in January, down from 30.89% in December, marking its fourth consecutive monthly decline and making the CPI figure the lowest since November 2021, when prices rose by 21.31%.
According to official data released on 3 February by the Turkish Statistical Institute (TÜİK), the largest year-on-year price increases in January were recorded in education (64.7%), housing (45.36%) and hotels, cafes and restaurants (33.31%). At the other extreme, clothing and footwear recorded the most moderate increases (7.07%), followed by communications (20.09%) and health (21.63%). Compared to the previous month, the monthly rise in inflation was 4.84% in January.
Treasury and Finance Minister Mehmet Şimşek said in a post on his official X account after the CPI data was released that food prices, which rose well above the long-term average due to the impact of adverse weather conditions (including drought) and seasonal factors, influenced consumer prices in January, although the minister noted that the government expects January-specific factors to have a limited effect on the underlying trend of inflation.
“The decline in annual services inflation has continued uninterrupted for 21 months, while core goods inflation remained subdued at 17.4%,” he said, adding that “annual rental inflation declined by 44 points compared to the same month last year”.
“We will resolutely pursue our disinflationary policies, supported by supply-side measures. In this way, we expect the underlying trend of inflation to continue to fall and the rigidities in price behaviour to ease,” the minister concluded.
All eyes on Turkish Central Bank
With the annual inflation rate in Türkiye continuing to moderate, attention now turns to the next meeting of the Monetary Policy Committee (in Turkish Para Politikası Kurulu or PPK) of the Turkish Central Bank, where further interest rate changes could be announced.
Last January, the Central Bank of Turkey cut its benchmark rate – the one-week repurchase rate – by 100 basis points from 38% to 37%, although most economists had expected a deeper cut of up to 150 basis points in the light of inflation data. The next PPK meetings are scheduled for 12 March and 22 April.
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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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