Türkiye’s inflation declines for 9th month, beating expectations

February’s consumer price data revealed that Türkiye’s annual inflation has maintained its downward trend since June 2024, falling to 39.05%, while monthly inflation stood at 2.27%, the Turkish Statistical Institute (TurkStat) reported on Monday.

These figures exceeded market expectations, which had projected annual inflation at 39.9% and monthly inflation at 2.97% for February.

In terms of main expenditure groups, clothing and footwear recorded the lowest annual price increase in February, rising by 20.84% compared to the same period last year. In contrast, the education sector saw the highest price surge, reaching 94.90%.

On a monthly basis, clothing and footwear experienced the sharpest price decline, dropping by 5.06%, while the education sector registered the highest increase at 9.92%.

Turkish market anticipates another 250-basis-point cut from CBRT

The 12-month average consumer price index (CPI), which is primarily used to determine rent price adjustments, stood at 53.83%.

Meanwhile, the domestic producer price index (D-PPI) continued to slow down, with its annual increase easing to 25.21%, while registering a 2.12% rise on a monthly basis.

Treasury and Finance Minister Mehmet Simsek detailed the figures in his post on X, noting that annual inflation in core goods fell to 21.7%, a 32-point drop from the same month in 2024. “With fiscal and revenue policies supporting the disinflation process and improving expectations, we anticipate the steady decline in inflation will continue,” he added.

Following February’s inflation data meeting expectations, market focus has shifted to the Central Bank of the Republic of Türkiye’s (CBRT) interest rate decision, fueling speculation of another 250-basis-point cut, which would lower the policy rate to 42.5%.

The Monetary Policy Committee (MPC) of the Turkish central bank is set to announce its decision on the policy interest rate on Thursday at 2 p.m. local time (GMT+3).