MediumIV Macro Policy & Sovereign Debt3 September 2026, Thursday · 10:00 TRT (UTC+3)
Annual inflation in Türkiye eases to 31.51% in August, while producer prices rise by 27.95%
Monthly inflation was 1.84%; the core C index stood at 30.07% and services inflation remained above 40%.
According to TurkStat data, consumer prices rose by 1.84% month on month and 31.51% year on year in August; annual inflation eased from 31.75% in July. According to an assessment by the Presidency of Strategy and Budget, the core C index, which excludes energy, food and certain other items, rose by 1.81% month on month and 30.07% year on year.
Domestic producer prices rose by 2.57% month on month and 27.95% year on year. Services inflation remaining at 40.28% shows that price stickiness persists. The monthly acceleration in producer prices points to the risk that energy costs will pass through to consumer prices in the coming months. Although the decline in annual inflation reflects an improvement in the underlying trend, the rise in the year-end expectation to 29.61% in the September Survey of Market Participants, above the Medium-Term Programme's forecast of 28.4%, shows that the disinflation path is vulnerable to energy prices.
Talay assessment
Bottom line
Annual inflation easing from 31.75% to 31.51% shows disinflation continuing, but very slowly. Services inflation at 40.28% signals stickiness, while monthly producer price growth of 2.57% points to a risk of energy costs passing through to consumer prices in coming months. The year-end expectation rising to 29.61% suggests the most likely path is a slow decline that nevertheless ends above the Medium-Term Programme forecast of 28.4%.
Likely effects
- Households and services pricesNegative1–6 months
Services inflation above 40% continues to strain household budgets through items such as rent, education, transport and health. Real income losses persist among groups whose wage rises lag behind.
- Monetary policyUncertain1–6 months
The core C index at 30.07% and energy-driven risks indicate the CBRT will not rush back to rate cuts. The period of tight monetary policy is lengthening, delaying any easing of credit conditions.
- Pass-through from producer costsNegativeWeeks
Monthly domestic producer price growth of 2.57% exceeds the 1.84% rise in consumer prices. This gap indicates building pressure on businesses to pass cost increases on to selling prices in coming months.
Possibilities, ranked
- 1Slow decline, year-end above MTP60%
Annual inflation keeps easing gradually but, owing to sticky services and energy costs, ends the year above the MTP forecast of 28.4%.
Watch: Monthly CPI and PPI data for September–November and the year-end expectation in the Market Participants Survey.
- 2Energy shock halts the decline30%
Rising energy prices pass quickly through producer prices to consumers and annual inflation rises for one or two months.
Watch: Monthly CPI above 2% and annual inflation rising from the previous month.
- 3Disinflation accelerates10%
Energy prices calm and services inflation slows markedly; year-end inflation approaches the MTP forecast.
Watch: A marked drop in services inflation and a pullback in the survey's year-end expectation.
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.