Turkey’s Inflation Slows Sharply in November

Turkey’s latest inflation report for November 2025 revealed a cooler price environment than financial markets anticipated, signaling that the country’s disinflation path may be strengthening faster than expected. According to newly released data from TÜİK, consumer prices rose 0.87% month-on-month, well below the market forecast of 1.3%, while the annual CPI eased to 31.07%, versus the expected 31.6%. The figures underscore a notable moderation across several major spending categories, reshaping expectations heading into the next monetary policy cycle.

November CPI Undershoots Market Forecasts

TÜİK’s 2025 Consumer Price Index (2003=100) report showed multiple measures of inflation drifting lower compared to previous months and previous years. The monthly increase of 0.87% marked a substantial drop from 2.24% in November 2024 and 3.28% in November 2023, highlighting a potential structural easing in price pressures.

From December of the prior year, prices are now up 29.74%, also significantly lower than the 42.91% pace recorded one year earlier. On a twelve-month moving average basis, inflation landed at 35.91%, compared with 60.45% a year ago. This longer-term gauge further reinforces the trend toward decelerating consumer costs.

Major Spending Groups Show Mixed Dynamics

Among the three largest components of Turkey’s consumption basket—food and non-alcoholic beverages, transportation, and housing—the data depicted a diverse inflation landscape.

The food and non-alcoholic beverages category, which carries one of the largest weights in the index, rose 27.44% year-over-year. Its contribution to the annual CPI stood at 6.83 percentage points.

The transportation sector saw annual inflation of 29.23%, contributing 4.55 percentage points, while housing inflation surged 49.92%, generating the largest single-group impact with a 7.57-point contribution.

Despite elevated annual figures, monthly changes tell a different story. Food prices unexpectedly fell 0.69% in November, providing a downward drag of –0.17 points on the overall monthly index. Meanwhile, transportation and housing costs climbed 1.78% and 1.70%, adding 0.27 and 0.29 points, respectively, to the monthly reading.

These cross-currents indicate a disinflation environment driven by weak food prices and stable core components, even as energy-linked items and housing continue exerting pressure.

Most Product Categories Saw Price Increases

The CPI basket includes 143 basic product groups defined under the COICOP 5-level classification. In November:

• 28 groups registered price declines,

• 7 groups showed no change,

• 108 groups experienced price increases.

This broad-based pattern—where the majority of items still rise but several major categories decline—reflects a gradual normalization rather than a sudden or isolated shift.

Core Inflation Indicator B Accelerates Slightly

The special CPI measure known as B-index, which excludes unprocessed food, energy, alcoholic beverages, tobacco, and gold, remains a key lens for analyzing underlying inflation momentum.

In November, the B-index rose:

• 1.27% month-on-month,

• 32.17% year-on-year,

• 30.64% since December of the previous year,

• 35.69% on a 12-month average basis.

The more substantial monthly increase in core inflation relative to the headline figure suggests that, while volatile components helped suppress overall CPI, underlying price dynamics remain somewhat sticky. This divergence will likely draw policymakers’ attention as they assess the durability of the disinflation trend.

Disinflation Momentum Strengthens Ahead of 2026

Turkey’s November inflation data signals that the country is entering a period of more sustainable price moderation, supported by:

• Softer food prices

• Stabilized demand-side conditions

• Slower annual price increases across most goods

While risks remain—particularly in housing costs, energy-related categories, and long-term core inflation—November’s report may help bolster confidence that the headline inflation trajectory is bending downward at a faster-than-expected pace.