Turkey: Inflation falls in September
Latest reading: Inflation fell to 49.4% in September, following August’s 52.0%. September’s result represented the lowest inflation rate since July 2023. Looking at the details of the release, prices for food, housing and transport all rose at slower rates in September.
Meanwhile, annual average inflation fell to 63.5% in September (August: 64.9%). Moreover, core inflation fell to 49.1% in September from August’s 51.6%.
That said, month-on-month inflation surprised markets on the upside, rising to 2.97% in September from August’s 2.47% due to stronger price pressures for services.
Outlook: Our panel expects headline inflation to ease further in the coming quarters due to a high base of comparison and prior monetary policy tightening.
Panelist insight: Muhammet Mercan, chief economist at ING, commented:
“Overall, despite continuing improvements in annual inflation (mainly due to base effects), Turkey’s underlying trend remained elevated in September on the back of services. […] The odds of a rate cut in November have declined and we may only see a change here if October’s inflation data brings a significant positive surprise.”