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Turkey Inflation May 2025

Turkey: Inflation declines to lowest level since November 2021 in May

Latest reading: Inflation came in at 35.4% in May, which was down from April’s 37.9%. May’s figure marked the lowest inflation rate since November 2021 and came in below market expectations. The moderation was largely driven by more moderate increases in prices for food, hospitality and housing. On the flip side, prices for transportation rose at a faster clip.

Annual average inflation fell to 45.8% in May (April: 48.7%). Meanwhile, core inflation fell to 35.4% in May from the previous month’s 37.1%.

Lastly, consumer prices rose 1.53% in May over the previous month, below the 3.00% increase seen in April. May’s result marked the softest rise in prices since December 2024.

Outlook: Our panelists expect inflation to continue easing the coming quarters thanks to a high base effect and past interest rate hikes.

Panelist insight: Clemens Grafe and Basak Edizgil, economists at Goldman Sachs, commented on implications for monetary policy:

“Given that the TCMB cited the rise in inflation due to FX pass-through in April and the risk of continued pressure in May as the reasons behind its surprise rate hike in April, we think that today’s release opens the door for a rate cut in June. However, currently the TCMB’s average funding rate is still at the upper end of the corridor, and we think that it is unlikely that the Bank will start easing monetary policy as long as this is the case. We therefore continue to expect the Bank to re-enter its cutting cycle in July.”

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