Turkey's annual inflation rate falls to a 44-month low of 33.5% in July.
Turkey's Inflation Eases Slightly, Remains High by Global Standards
As of July 2025, Turkey's annual inflation has eased to approximately 33.5%-34%, continuing a downward trend from 35% in June and 44% at the end of 2024, according to official Turkish Statistical Institute (TurkStat) data. Despite this decrease, inflation remains significantly high by global standards.
Key sectors that have experienced the highest annual price increases include:
- Housing and utilities: Inflation around 62%, the steepest among the main categories.
- Health services: Approximately 37.5% increase annually.
- Communications: Around 19.62% annual inflation.
- Transport: Approximately 27% inflation annually, with gasoline and diesel prices having increased by about 890% and 1,070% respectively since 2016.
- Food and non-alcoholic beverages: Around 28% inflation, with some subcategories witnessing very high rises, for example, the price of milk increased by nearly 1,500% since 2016.
- Household furnishings and maintenance: About 30% inflation.
- Hotels, cafes, and restaurants: Around 34% annual inflation.
Consumer prices increased by about 2.06% month-on-month in July 2025, which was below market expectations and marks the 14th consecutive month of slowing inflation growth.
The inflation figures from official sources are subject to skepticism, with some independent groups like ENAG estimating inflation as high as 65% for July 2025, suggesting official data might understate the true inflation rate. However, the official data remains the benchmark for economic analysis and policy decisions.
In response to the moderation in inflation, BBVA Research has revised Turkey's year-end inflation forecast slightly downwards to 30% and anticipates cautious interest rate cuts by the Central Bank of Turkey starting in the second half of 2025 to support continued disinflation.
In summary, Turkey is experiencing high but easing inflation, with housing and utilities, health services, and food-related sectors showing the largest annual price increases. The government and monetary authorities are closely watching inflation dynamics amid cautious policy adjustments.
- Turkish finance experts are closely monitoring the business sector, as the high inflation rate in Turkey continues to impact various industries, particularly housing and utilities, food and non-alcoholic beverages, and health services.
- Despite the Turkish government's efforts to curb inflation, recent statistics show that inflation remains significantly higher than the global average, which raises concerns about the country's economic stability in the realm of general news and politics.
- In response to the easing but still high inflation rate, the Central Bank of Turkey is preparing to implement cautious interest rate cuts in the second half of 2025, a move that BBVA Research believes will support continued disinflation, with expectations that the year-end inflation will be around 30%.
