Turkish annual inflation eased in August for the third straight month, even as monthly prices advanced slightly compared to the previous reading, raising expectations that the central bank might lower borrowing costs next week.
The consumer price index (CPI) cooled slightly to 31.51% in August, according to the official data released by the Turkish Statistical Institute (TurkStat) on Thursday.
The index was down from 31.75% in July and marked a third month of easing despite the ongoing conflict between the U.S. and Iran and rising energy prices.
Month-over-month consumer prices advanced 1.84%, accelerating from 1.78% in July, TurkStat said.
Both rates, however, came in slightly below the market expectations.
In a Reuters poll, the monthly inflation rate was forecast to be 1.93% and the annual rate 31.62%, as rising oil prices driven by tension between Iran and the U.S. continue to pose an upward risk to inflation.
The median estimate among 17 economists surveyed by Bloomberg was also 31.6%.
The annual increase in prices was led by education, health and housing, with education posting by far the largest increase at 53.44%.
The consumer price index rose 22.07% compared with December 2025, while the 12-month moving average increase stood at 31.79%, TurkStat said.
Turkish officials, in their assessments, flagged the impact of the conflict and said they were closely monitoring the effects of geopolitical developments on inflation.
As an oil and natural gas importer, Türkiye is exposed to the economic fallout of the conflict, especially due to the renewed surge in global energy prices.
"We are resolutely continuing our fight against inflation with a holistic approach and strong coordination with our institutions," Vice President Cevdet Yılmaz said on X.
"With the effect of a decrease in fresh fruit and vegetable prices, monthly inflation in the food category was 0.22%, while annual food inflation decreased by 3.7 percentage points compared to the previous month," he further said.
"While service inflation remained flat on an annual basis, monthly price movements were prominent due to rising transportation costs as a result of global tensions, as well as seasonal developments in rent and education prices," Yılmaz noted.
He went on to say that "sharp movements in energy and commodity prices, geopolitical developments, transformations in global trade, and protectionist tendencies are affecting the inflation outlook worldwide."
Commenting on the data, Treasury and Finance Minister Mehmet Şimşek said that inflation continued to fall "despite seasonal increases in education prices and the impact of the war on fuel prices."
"Core goods inflation fell to its lowest level since November 2020 at 15.9% annually, while annual rent inflation dropped to its lowest level in 46 months," he said on social media.
"While taking steps to limit the inflationary impact of global price shocks, we are also continuing our structural policies in line with our goal of lasting price stability," he added.
Another report shared by TurkStat on Thursday showed that the domestic producer price index (PPI) rose by 2.57% monthly for a 27.95% increase annually.
The Turkish central bank is due to convene for its committee meeting on Sept. 10.
The meeting and decision on interest rates come after the bank recently resumed its one-week repo auctions.
