Türkiye’s annual consumer price inflation slowed to 35.05% in June 2025, down from 35.41% in May, according to data released by the Turkish Statistical Institute (TurkStat) on Thursday.

The monthly consumer price index (CPI) rose by 1.37%, below market expectations of 1.50%, signaling a continued moderation in price pressures.

The CPI, based on a 2003=100 index, increased by 16.67% since December 2024 and by 43.23% on a 12-month moving average. Core CPI, which excludes volatile items such as unprocessed food, energy, alcoholic beverages, tobacco, and gold, rose by 34.62% annually and 1.76% monthly, reflecting persistent broad-based inflationary pressures.

Among the main expenditure groups, housing saw the steepest annual increase at 65.54%, contributing 9.22% to the overall CPI change. Food and non-alcoholic beverages rose by 30.20% year-on-year, adding 7.60% to the annual change, while transportation increased by 27.72%, contributing 4.51%. On a monthly basis, housing and transportation posted gains of 2.62% and 2.38%, respectively, while food and non-alcoholic beverages dipped by 0.27%, reducing the monthly CPI by 0.07%.

Of the 143 basic headings in the CPI basket, 112 saw price increases in June, 26 recorded declines, and five remained unchanged, TurkStat reported. The data underscores ongoing challenges for Turkish households, particularly in housing, which continues to drive inflation significantly.The slowdown in inflation has sparked optimism about potential monetary policy easing. Posts on X suggested that the better-than-expected figures strengthen the case for a rate cut by the Central Bank of the Republic of Turkey (CBRT) at its July meeting, though the bank’s year-end inflation target of 24% remains distant. The CBRT has maintained its one-week repo rate at 46%, despite criticism over entrenched inflation expectations and lira vulnerability.

The decline in inflation follows a peak of 85.51% in October 2022, but price pressures remain elevated, driven by housing costs and wage indexation effects. Analysts warn that sustained policy credibility and lira stability are critical to achieving further disinflation. (ILKHA)