According to data released by the Turkish Statistical Institute (TÜİK), Turkey’s monthly inflation rate accelerated to 2.06% in July, up from 1.37% in June. On an annual basis, inflation came in at 33.52%, marking a slight decline from 35.05% recorded the previous month.
Both monthly and annual inflation figures came in below market expectations. The Bloomberg HT survey had forecasted a 2.38% monthly increase and a 34.10% annual rate.
Core and Sectoral Figures
TÜİK reported the annual core inflation rate at 34.70% in July.
On a monthly basis, the housing group recorded the highest price increase at 5.78%, followed by alcoholic beverages and tobacco at 5.69%, and communication at 4.25%. Notably, clothing and footwear saw a monthly decline of 5.82%, indicating deflation in that category.
On a yearly basis, the highest increase was seen in education with a sharp 75.54% rise, followed by housing at 62.01%, and health at 37.49%.
Out of the 143 main expenditure groups tracked in the index, 120 saw price increases, 18 saw decreases, and 5 remained unchanged.
Producer Price Inflation Slows Further
Producer inflation showed a continued downward trend in July. The Domestic Producer Price Index (D-PPI) rose 1.73% month-on-month, while the annual increase slowed to 24.19%.
Breakdown by industry showed:
- Mining and quarrying: +28.30% annually
- Manufacturing: +24.02%
- Electricity, gas, and distribution: +22.10%
- Water supply: +55.74%
Among major industrial groupings, the annual changes were:
- Intermediate goods: +21.91%
- Durable consumer goods: +31.35%
- Non-durable consumer goods: +26.40%
- Energy: +20.82%
- Capital goods: +28.34%
Despite the monthly uptick, the ongoing slowdown in producer inflation may provide some relief to cost pressures on manufacturers in the coming months.
Source: Bloomberght/ Prepared by: İlayda Gök