As inflation continues to decelerate, the central bank is widely expected to deliver another 250 basis-point cut this week
Türkiye’s annual inflation rate eased for the ninth consecutive month, reaching 39.05 percent in February. This marks the lowest inflation level since July 2023, according to official data released on Monday. Annual core inflation, which excludes volatile items such as energy and food, meanwhile, fell to a 37-month low of 40.21 percent.
On a monthly basis, the consumer price index (CPI) rose 2.27 percent compared to 5.03 percent in January. Core CPI increased 1.80 percent month-on-month, significantly lower than the 5.59 percent rise recorded in January.
Inflation falls below market expectations
Türkiye’s headline inflation decreased from 42.12 percent in January, falling below market expectations, TurkStat said. Economists polled by the Turkish state-run news agency last week had projected inflation to be at 40 percent.
The cost of energy rose by 43.92 percent year-on-year in February, slightly accelerating from January’s 43.05 percent. Meanwhile, food and non-alcoholic beverage prices increased at their slowest pace since November 2021, rising 35.11 percent, down from 41.76 percent in January. Price hikes were led by a 94.9 percent rise in education prices, while housing prices were up 70.81 percent.
“We expect the steady decline in inflation to continue, thanks to fiscal and income policies that support the disinflation process and the improvement in expectations. We will resolutely implement our policies to achieve price stability, which will permanently improve the purchasing power and income distribution of our citizens,” stated Treasury and Finance Minister Mehmet Simsek in a post on social media platform X.
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Central bank to deliver 250 basis-point cut this week
In February, Türkiye’s central bank lifted its annual consumer inflation forecast for 2025 from 21 percent to 24 percent, while keeping its forecast for 2026 unchanged at 12 percent.
The Turkish central bank cut its policy rate to 45 percent from 50 percent in December, after keeping it steady for eight months straight. Previously, the bank raised its key rate by 4,150 basis points to control inflation after years of low rates aimed at fostering growth.
As inflation continues to decelerate, the bank is widely expected to deliver another 250 basis-point cut, slashing the one-week repo auction rate to 42.5 percent when its Monetary Policy Committee meets on March 6.
