Türkiye Inflation Hits 32.95% in August: Economists Say Rate Cuts Are Off the Table
Inflation
Türkiye’s annual inflation climbed to 32.95% in August 2025, surpassing both forecasts and the market consensus of 1.80% monthly CPI. According to the Turkish Statistical Institute (TÜİK), monthly inflation stood at 2.04%, while independent calculations painted an even starker picture.
The data prompted strong reactions from leading economists, who stressed that the Central Bank of Türkiye (CBRT) no longer has room to deliver the 300-basis-point interest rate cut previously speculated.
Hakan Kara: “300 Basis Point Cut Now Unlikely”
Former CBRT Chief Economist Prof. Dr. Hakan Kara noted that the Bank’s official projection of bringing inflation down to 29% by year-end is now far harder to achieve:
“To stay under the 29% forecast limit, monthly inflation would have to average 1.6% from now on. After yesterday’s growth data and today’s inflation release, the probability of a 300 basis point cut in September has decreased significantly.”
Şenol Babuşcu: TÜİK–ENAG Gap Widens
Academic Prof. Dr. Şenol Babuşcu highlighted the widening divergence between different inflation measurements:
“The difference between ENAG and TÜİK inflation calculations is almost double on an annual basis.”
His comparison showed August inflation at 32.95% (TÜİK), 40.83% (İTO), and 65.49% (ENAG). Babuşcu added that in the first eight months of 2025, the cumulative inflation gap between TÜİK and ENAG reached 17.4 points.
İris Cibre: “How Will the CBRT Cut Knowing It Can’t Reach Its Target?”
Financial analyst İris Cibre emphasized that the CBRT’s official year-end target of 24% is already impossible:
“To reach 24%, monthly inflation must average 0.51%, which is impossible. Even the upper-band estimate of 29% requires 1.51% monthly inflation—also very unlikely.”
Cibre said the Bank would face credibility risks if it proceeded with a rate cut:
“A central bank that pledged, ‘I will do everything to reach 24%,’ must now say, ‘I won’t cut rates because I can’t hit my target.’ Otherwise, lowering rates signals it has abandoned its own commitment.”
Güldem Atabay: “No Room for a Cut in September”
Economist Güldem Atabay underlined multiple inflationary pressures:
“We’re facing cost pressures from producer prices, high monthly headline and core inflation, delayed food price surges, and imbalanced growth. Political tensions also add to risks. The CBRT should not cut rates at the September 11 MPC meeting— even a small cut would be a mistake. Inflation under 30% by year-end is unrealistic.”
Barış Esen & Barış Soydan: High Risks for Policy
Economist Dr. Barış Esen summarized the policy dilemma bluntly:
“Inflation is high, growth is high, political and legal tensions are high. In this environment, can rates be cut?”
Similarly, journalist Barış Soydan pointed to market reactions:
“TÜİK announced August inflation at 2.04%, far above expectations (1.80%). The CBRT’s 2026 inflation target of 16% is a distant dream. The idea that ‘rates can’t be cut under such inflation’ combined with yesterday’s CHP ruling caused the stock market to drop 2%.”
Social and Household Impact
Tax expert Ozan Bingöl calculated how inflation eroded purchasing power for low-income groups:
“According to TÜİK data, the loss of purchasing power in the first eight months was 21.50%. For a minimum wage earner, this translates to a loss of 4,752.50 lira, reducing their wage’s real value to 17,352.17 lira.”
Economist Burcu Aydın added that the burden fell disproportionately on essentials:
“August inflation once again worsened income inequality. The largest contributions came from food, housing, and transportation, which together make up two-thirds of the consumer basket.”
What’s Next for the Central Bank?
The Monetary Policy Committee (MPC) meets on September 11, and analysts agree that rate cuts are off the table given the inflation dynamics and credibility risks. Instead, markets will watch closely whether the CBRT maintains its commitment to its stated targets or signals a shift in stance.
