CBRT: Food and Services Drive Monthly Price Increases in September, “Main Trend Rising”
tcmb-enflasyon
Summary:
The Central Bank of the Republic of Türkiye (CBRT) said in its Monthly Price Developments Report for September that the underlying trend in inflation accelerated compared with the previous month. Food and services once again emerged as the leading groups driving price increases, while producer inflation also continued to rise.
Monthly Inflation at 3.23%, Annual Rate Rises to 33.29%
According to the CBRT report, consumer prices rose by 3.23% month-on-month in September, pushing the annual inflation rate up by 0.34 points to 33.29%.
The Bank noted that the underlying trend of inflation increased, with food and services standing out as the main contributors to monthly price growth.
Food Prices Hit by Frost and Drought
The report attributed the rise in food prices to supply-side pressures caused by agricultural frost and drought. Both processed and unprocessed food categories recorded strong price increases.
Analysts warned that these supply-driven pressures may persist into the final quarter of 2025, keeping food inflation elevated.
Back-to-School Effect Fuels Service Inflation
Service inflation rose at a faster pace than in August, largely due to back-to-school effects observed across multiple categories.
Education (private universities), transportation (school shuttle fees), and hotels-restaurants (dormitory costs) were among the leading items driving inflation.
According to the CBRT, the back-to-school impact alone added roughly 0.7 percentage points to monthly consumer inflation.
Housing and Energy Show Mixed Trends
Despite a high rate of lease renewals linked to seasonal factors, rental inflation weakened slightly compared to the previous month.
Energy prices, meanwhile, recorded a modest increase, led by higher fuel prices, but overall remained relatively contained.
Producer Prices Continue to Climb
Producer price inflation (PPI) maintained its upward trend, with the annual PPI rising by 1.43 points to 26.59% in September.
The CBRT said this overall picture indicates that “the main trend of monthly inflation increased compared with the previous month.”
Economist Commentary: Rate Cut Possible by December
Economist Assoc. Prof. Mehmet Levent Yılmaz commented on the report, noting that although seasonally adjusted data show some slowdown in core inflation indicators, the CBRT is unlikely to begin cutting rates in early 2025.
“I do not expect rate cuts to begin in the first quarter,” Yılmaz said. “If the CBRT signals in November, the first move could come in December — by 50 or 100 basis points, not the 250-point cuts markets anticipate.”
TURKSTAT Data: Seasonally Adjusted CPI Lags Behind Headline
Separately, the Turkish Statistical Institute (TURKSTAT) published its seasonally adjusted consumer price index (CPI) data for September.
Seasonally adjusted CPI rose 2.71% month-on-month, below the headline inflation rate of 3.23%. The market consensus had been for a 2.48% increase.
By sub-index, the B index (excluding energy, food, beverages, tobacco, and gold) rose 2.56%, while the C index (excluding unprocessed food, energy, beverages, tobacco, and gold) increased 2.27% on a monthly basis.
Unadjusted data showed the B index at 1.69% and the C index at 3.22%.
Inflation Outlook: Upward Risks Persist
Economists expect price pressures to remain elevated heading into the final quarter, driven by food supply issues, rising service costs, and still-high producer prices.
Market participants anticipate that the CBRT will keep monetary policy tight through year-end to anchor expectations before considering limited rate cuts in December.
