Türkiye Inflation Eases in January Amid Seasonal Price Rise
Türkiye Inflation Cools Further Despite January-Specific Monthly Rise
Annual inflation in Türkiye eased for the fourth consecutive month in January, reaching 30.65%, down from 30.9% in December — the lowest reading since November 2021, according to the Turkish Statistical Institute (TurkStat). However, monthly inflation surged unexpectedly to 4.8%, up from 0.9% in December, largely due to seasonal adjustments and one-off price changes.
Sectoral Drivers of Inflation
Food, transport, and housing remained the main contributors to rising costs in January.
- Food and non-alcoholic beverages rose 6.59%, adding 1.61 points to the monthly inflation.
- Transport prices increased 5.29%, contributing 0.88 points.
- Housing costs were up 4.43%, contributing 0.51 points.
On a year-over-year basis, the steepest price increases were seen in:
- Education: 64.7%
- Housing: 45.4%
- Food: 31.7%
Official Commentary and Policy Stance
Treasury and Finance Minister Mehmet Şimşek emphasized that the January spike was driven by food prices and seasonal factors, noting their impact on the broader inflation trend would be limited. He reiterated that disinflationary policies would continue with determination.
“The temporary rise in January, driven by food and seasonal effects, will not alter the underlying disinflation trend. Our policies remain firmly on track.”
Vice President Cevdet Yılmaz confirmed the government's commitment to reducing inflation to single digits, stating that temporary fluctuations would not derail the overarching economic program. Authorities continue to coordinate monetary, fiscal, and income policies, alongside structural reforms targeting food, housing, logistics, energy, and human capital.
Monetary Policy and Forward Targets
The Central Bank of the Republic of Türkiye (CBRT) lowered its key interest rate by 100 basis points to 37% in January, citing inflation trends and pricing expectations.
The bank's official targets are:
- Interim Target (End of 2026): 16%
- Projected Range (2026): 13% - 19%
Market surveys suggest year-end inflation for the current period could decline to around 23%.
Producer Price Index (PPI) Data
Additionally, TurkStat reported that the domestic producer price index (PPI) rose 2.67% month-on-month in January, with an annual increase of 27.17%, reflecting ongoing pressures in the production sector.
Outlook
Türkiye’s inflation outlook shows gradual cooling, yet seasonal and sector-specific factors continue to create short-term spikes in consumer prices, keeping markets attentive to upcoming economic reports.
