Turkey's Annual Inflation Drops to 32.9 Percent in August

The Turkish Statistical Institute (TÜİK) reported that the consumer price index (CPI) rose 2.04 percent monthly and 32.95 percent annually.

The CPI (2003=100) increased 2.04 percent from the previous month, 21.50 percent from December of the previous year, 32.95 percent from the same month last year and 39.62 percent on a twelve-month average basis.

Finance Minister Mehmet Şimşek commented on the figures via X: "The disinflation process continues without interruption. In August, annual inflation declined 42.5 points from last year's May to below 33 percent. The food group, impacted by frost and drought, saw price increases well above the long-term average, contributing 0.7 points to monthly inflation. The drop in core goods and services inflation persisted in August. Core goods inflation stood at 19.8 percent, while services inflation fell to 45.8 percent, the lowest since April 2022," Şimşek said.

"We will maintain our commitment to fiscal discipline and structural reforms to secure permanent price stability, essential for sustainable growth and enhanced social welfare," he added.

The three main expenditure groups with the highest weights recorded annual increases: Food and non-alcoholic beverages at 33.28 percent, transportation at 24.86 percent and housing at 53.27 percent. 

Monthly changes in these groups were as follows: Food and non-alcoholic beverages (up 3.02 percent), transportation (up 1.55 percent) and housing (up 2.66 percent).

Among the 143 basic headings in the index, 20 showed decreases, 4 remained unchanged and 119 increased in August.

Producer inflation picked up pace, with the monthly producer price index rising to 2.48 percent in August from 1.73 percent in July. The annual rate climbed to 25.16 percent from 24.19 percent.

Seperately, Vice President Cevdet Yılmaz explained on X that the August figure came in slightly above expectations due to food prices affected by frost and drought, which contributed about one-third to the monthly inflation.

"The annual inflation rate is developing on a path consistent with the Central Bank's forecast range of 25-29 percent at the end of 2025," Yılmaz noted.

"Within the framework of the medium-term program to be updated in the coming days, our determined and coordinated fight against inflation will continue by pursuing holistic policies."

He further emphasized priorities in areas such as human capital, logistics, social housing, food and energy, along with productivity-enhancing approaches and green and digital transformation processes.

These, he said, will support balanced growth while sustaining the disinflation process.