Türkiye's annual inflation slows to 35 pct in June, beating expectations
ANKARA
Türkiye's annual inflation was at 35.05 percent in June, down from 35.41 percent in May, below market estimates, official figures from the Turkish Statistical Institute (TÜİK) showed on July 3.
The markets had expected annual inflation for last month to come in at 35.2 percent.
The figure marked the lowest increase in consumer prices in Türkiye since December 2021, when it was 36.08 percent.
The monthly inflation rate in June was 1.37 percent, down from 1.53 percent in May.
The monthly figure was also below market forecasts of 1.45 percent.
Commenting on the data, Finance Minister Mehmet Şimşek said that inflation eased in June despite rising oil prices due to geopolitical tensions.
"In services, where inertia is high, annual inflation dropped to 50 percent after three years," Şimşek said on X.
"Our determination in the disinflation process has become evident in both actual data and expectations," he noted.
Şimşek stated that declining commodity prices, reduced volatility in financial markets, improving inflation expectations, and supportive demand conditions in recent times will contribute to the continued decline in inflation in the second half of the year.
"Our citizens can rest assured; a noticeable slowdown in inflation has begun across various sectors, from food and durable consumer goods to education and transportation, and this trend will continue," he added.
The highest price increases in June, on a yearly basis, were observed in education with 73.33 percent, housing with 65.54 percent, and health care with 38.7 percent, according to TÜİK data.
On the other hand, the lowest price hikes were in clothing and footwear with 14.47 percent, communications with 18.43 percent, and recreation and culture with 27.53 percent.
Following the release of the June data, now all eyes will turn to the Central Bank later this month when it meets to decide on interest rates.
The bank’s Monetary Policy Committee (MPC) will meet on July 24.
In June, the bank kept the policy rate, the one-week repo auction rate, unchanged at 46 percent. It also maintained the overnight lending rate and the overnight borrowing rate at 49 percent and 44.5 percent, respectively.
The bank increased the policy rate from 42.5 percent to the current 46 percent in April.
After this month, the bank will hold three more MPC meetings in the remainder of the year, on Sept. 11, Oct. 23 and Dec. 11.
