Inflation Hits 33% in Turkey, Economists Warn Rate Cuts No Longer Possible

Turkey’s official inflation figures for September 2025 show that price pressures remain stubbornly high, casting serious doubt on the Central Bank’s monetary policy. According to data from TÜİK (Turkish Statistical Institute), monthly inflation was 3.23%, while the annual rate climbed to 33.29%. The release immediately triggered a wave of commentary from leading economists, many of whom stressed that the disinflation process has broken down and that the Central Bank of the Republic of Türkiye (CBRT) can no longer justify further rate cuts.

Economists Sound the Alarm

Economist Alaattin Aktaş was among the first to warn that the government’s year-end targets had already been breached: “Annual inflation fell to 32.95% at the end of August but rose again to 33.29% in September. This means the disinflation process has definitely stalled. With nine-month CPI at 25.43%, the Central Bank’s 24% year-end target is already surpassed.”

Financial markets expert İris Cibre echoed this sentiment bluntly: “Monthly inflation 3.23%. Annual 33.29%. The Central Bank cannot cut rates with this inflation. Sorry.” She also criticized the unrealistic goal of reducing inflation to 16% by 2026, noting that structural drivers like tax hikes, wage adjustments, and rental contracts would keep price growth elevated.

Prominent economist Mahfi Eğilmez highlighted that both consumer (CPI) and producer (PPI) inflation picked up in September, commenting simply: “Year-end forecasts are already invalid.”

Policy Credibility at Risk

Nuri Sevgen underlined that both CPI at 33.29% and PPI at 26.59% effectively close the door on further monetary easing: “With these figures, the CBRT will likely stop rate cuts this month. Inflation came in well above expectations.”

Veteran analyst Timothy Ash was more direct, criticizing the Central Bank’s earlier policy moves: “Turkey’s inflation across all components in September was disappointing. Headline inflation far exceeded 3%. The CBRT cut rates too early and too aggressively, and that undermines credibility.”

Inflation Beyond the Headline

Dr. Barış Esen reminded observers that headline inflation figures do not tell the full story, emphasizing instead the categories that hit households hardest: “Forget the headline—look at what really crushes citizens: education up 66%, housing up 51%, food up 36%.” His remarks underline how inflation is experienced differently across income groups, with essentials far outpacing official averages.

Economist Tunç Şatıroğlu criticized the Central Bank’s broader strategy, saying shifting targets have left policy directionless: “The policy assumption that cutting rates brings inflation down has collapsed. Targets of 24% and later 16% are now irrelevant. With inflation above expectations, some might even argue for more cuts, which would be a policy mistake.”

Long-Term Comparisons Paint a Bleak Picture

Fatih Özatay stressed that inflation remains significantly higher than historical averages. He pointed out that the core C-index (3.22%) was nearly identical to the headline rate (3.23%), meaning underlying pressures are broad-based: “From 2003–2017, September inflation averaged 0.67%. From 2003–2024, it averaged 1.47%. In September 2025, it came in at 3.2%. In short, inflation is high.”

Professor Şenol Babuşcu highlighted the wide gap between TÜİK’s official data and ENAG’s alternative calculations, which put annual inflation at 63.23%, nearly double the official figure: “The difference between ENAG and TÜİK is almost twofold. In the first nine months of 2025 alone, the cumulative gap reached 18.75%.”

Sharp Criticisms of Policy Direction

Siyasal iktisatçı İnan Mutlu used stronger language, accusing policymakers of misrepresenting the severity of the problem: “Rent, education, fresh produce, healthcare, transportation—prices in these categories are rising far above the headline. Which of these increases are ‘temporary’? Low-income groups and retirees are being subjected to an economic genocide.”

Professor Emre Alkin criticized the Central Bank’s communications strategy, arguing that its leadership makes bold claims on issues beyond its control: “When CBRT leaders issue definitive views on matters outside their mandate, that is not confidence—it is overconfidence. They continue to live with models, not realities.”

Outlook: Policy Space Shrinking

The September figures confirm what markets have increasingly feared: Turkey’s disinflation path has been derailed, and the Central Bank’s policy credibility is under strain. With inflation already well above official targets and core pressures persisting, economists agree that further rate cuts are now off the table. The debate is no longer whether inflation will fall, but how long it will remain entrenched above 30%—and at what cost to credibility, growth, and household welfare.