Annual inflation rate further slows to 52 percent in August

ANKARA

As widely expected, the decline in inflation continued in August with the annual rate slowing to a 13-month low of 51.97 percent, data from the Turkish Statistics Institute (TÜİK) showed on Sept. 3.

Dropped for the third consecutive month, the headline inflation came in below market forecast.

“Disinflation is becoming more evident,” Finance Minister Mehmet Şimşek said, hailing the latest official data, noting that monthly food prices declined after four years.

Due to temporary factors, monthly inflation was 2.5 percent in August and 1.4 percent excluding administered prices, Şimşek wrote on X.

“We expect a decline in the main trend of monthly inflation in the last quarter because of strengthened financial stability, balancing in the economy and improvement in expectations,” the minister said, reiterating the government’s determination to achieve the goals set out in the economic program.

“We expect inflation to be within the forecast range at the end of the year,” Şimşek said.

The Central Bank last month kept its inflation forecasts for 2024 unchanged at 38 percent.

Consumer prices advanced 2.47 percent month-on-month in August, easing from the 3.23 percent increase in July, showed TÜİK data.

Food and non-alcoholic beverage prices fell 1.1 percent monthly for an annualized increase of 44.88 percent, while clothing prices rose 0.35 percent month-on-month and 29.38 percent year-on-year.

The monthly increase in housing prices was 8.5 percent, which brought the annual rise to 101.5 percent, according to TÜİK data.

Education costs surged 11.34 percent month-on-month, while the year-on-year increase came in at 121 percent.

Prices at restaurants and hotels rose 2 percent monthly and 67.7 percent annually in August.

Transport costs were up 2.95 percent last month from July and they increased 28.96 percent from August last year.

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 2.88 percent in August, up from the previous month’s 2.47 percent. The annual increase in the B-index, however, slowed from 60.3 percent to 50.87 percent.

Another 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 2.99 percent, up from 2.45 percent in July.

The annual increase in this index eased from 60.23 percent to 51.56 percent.