Turkish Inflation Eases to 32.95% in August, Raising Hopes of Interest Rate Cut
Turkey’s inflation rate eased further in August, official data showed on Wednesday, raising expectations that the central bank may cut interest rates next week.
The annual inflation rate fell to 32.95%, down from 33.52% in July. Analysts had expected a slightly sharper decline to 32.6%. On a monthly basis, consumer prices rose 2.04%, mainly driven by higher costs for food, transportation, and housing.
Despite the slowdown, Turks continue to face high prices. Food and non-alcoholic beverages rose 33.3% over the year, while education costs surged 60.9%, housing increased 53.3%, and transportation jumped 24.9%.
Overall, the current inflation level is the lowest since the end of 2021, after peaking at over 75% in May 2024. This gradual easing has prompted the Turkish central bank to reduce its main policy rate from 50% to 43% between December and July, and another rate cut is anticipated next week.
However, official figures are disputed by independent economists from the Inflation Research Group ENAG, who estimate that consumer prices actually rose 65.5% year-on-year in August.
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