Turkish inflation slows to 44.4 percent in December
ANKARA
Türkiye's annual inflation rate slowed for the seventh consecutive month in December, data from the Turkish Statistical Institute (TÜİK) showed on Jan. 3.
Consumer prices rose by 44.38 percent last month, down from 47.1 percent in November.
Inflation will continue to fall, Finance Minister Mehmet Şimşek said, noting that consumer prices rose 1 percent in December, the lowest in the last 19 months.
“We expect inflation to be in line with our inflation target in 2025 on the back of increased support from fiscal policy, reduced rigidity in services inflation and improved expectations,” Şimşek wrote on X, commenting on the latest data.
Annual inflation in 2024 was 2.4 points above the Central Bank's forecast range announced in November 2023, the minister noted.
“We continue to implement the disinflation program with determination,” said Şimşek.
In the medium-term program, the government forecast that inflation will decline to 17.5 percent at the end of 2025 and drop to 9.7 percent in 2026.
Data from the statistics agency showed that consumer prices advanced 1.03 percent in December from November, which was lower than the market expectation for monthly inflation of 1.6 percent.
The monthly food inflation was 1.29 percent, which brought the annual increase to 43.6 percent.
Housing prices exhibited a monthly rise of 1.7 percent in December for an annualized increase of 69.03 percent.
Communication costs increased by 1.8 percent month-on-month and 34.1 percent year-on-year.
Clothing and transport prices declined by 0.67 percent and 0.42 percent in December from the previous month, respectively.
The B-index, one of the Central Bank’s favored core inflation indicators, which excludes prices of unprocessed food, energy, alcoholic beverages, tobacco products and gold, rose 1.17 percent in December, down from the previous month’s 1.54 percent.
The bank’s other favored gauge of core inflation, the C-index, which excludes energy, food and non-alcoholic beverages, alcoholic beverages, tobacco and gold prices, posted a monthly increase of 1.06 percent, slowing from 1.54 percent in November.
With the inflation data unveiled now, all eyes will be on the Central Bank, which started the easing cycle in December by delivering a 250 basis points reduction in its policy rate to 47.5 percent. That move marked the first cut in nearly two years.
The bank said last month that the one-week repo auction rate will remain the main policy instrument in 2025 and that it would hold eight MPC meetings next year, reducing the frequency from the monthly rate-setting meetings.
The next rate-setting meeting of the Central Bank is scheduled for Jan. 23.