Latest price developments report points to slower inflation momentum despite persistent pressure in services

The Central Bank of the Republic of Türkiye (CBRT) said the underlying trend of inflation eased in June, with price increases moderating across several major spending categories, according to its latest Price Developments Report. The assessment follows official data showing annual consumer inflation slowed to 32.1% in June from 32.6% in May, extending the country’s disinflation process.

The central bank said monthly inflation was driven primarily by developments in services and energy prices, while the pace of price increases slowed in core goods and food categories. The report noted that the underlying inflation trend improved compared with previous months, reflecting tighter monetary conditions and weaker domestic demand.

Services Inflation Remains Elevated

According to the report, services continued to be the main contributor to inflation, although momentum eased in several subcategories. Price increases remained pronounced in areas such as housing-related services, restaurants, hotels, education, and healthcare, while transportation services recorded a more moderate increase.

The CBRT also highlighted that seasonal factors influenced several service prices during the month, particularly in tourism-related activities, but overall underlying inflation in the services sector showed signs of slowing.

Food and Core Goods Moderate

Food inflation softened in June as unprocessed food prices recorded a more favorable trend compared with previous months. Core goods inflation also moderated, supported by relatively stable exchange rate developments and weaker domestic demand.

Energy prices, however, continued to exert upward pressure on consumer prices, reflecting fluctuations in global oil markets and imported energy costs.

Monetary Policy to Remain Tight

The central bank reiterated that it will maintain a tight monetary policy stance until a sustained decline in inflation is achieved. Policymakers have emphasized that future decisions will continue to be guided by inflation expectations, pricing behavior, domestic demand conditions, and global energy market developments.

The June report supports the CBRT’s view that the disinflation process remains on track, although officials continue to monitor geopolitical risks and energy price volatility, which could pose upside risks to the inflation outlook.

Source: Patronlar Dünyası/ Prepared by: İlayda Gök