Türkiye’s annual inflation rate edged up slightly in November, the state statistics agency said Monday, showing further signs of leveling off following a series of sharp interest rate hikes.

The rate moved to 61.98% last month from 61.36% in October, the Turkish Statistical Institute (TurkStat) said. Surveys expected annual inflation to have risen to around 63% in November before ending the year at about 67%.

Month-over-month, consumer price index (CPI) came in at 3.28%, according to the TurkStat, less than a forecast of 3.9% in a Reuters poll.

The pace at which consumer prices are rising has started to ease after six successive months of interest rate hikes took borrowing cost to 40% from 8.5% after the new economy administration orchestrated a shift from a yearslong policy of low borrowing costs after the May elections.

The tightening included hikes of 500 points in each of the last three months to cool demand. The central bank also adjusted a raft of credit rules.

Price rises are seen peaking next May between 70%-75% before dipping due to the monetary tightening cycle that is winding down.

So-called core inflation, which excludes volatile food and energy costs, climbed 1.9% every month in November, from a 3.7% pace in October and 5.28% in September.

"The ongoing decrease in core inflation in November is encouraging," said Treasury and Finance Minister Mehmet Şimşek.

"This indicates a significant loss of momentum in inflation," Şimşek wrote on social media platform X, formerly known as Twitter. "It is consistent with our annualized core inflation targets."

The core gauge ticked up to 69.9% from a year earlier, compared with 69.8% in October, the data showed.

"The fight against inflation is an ongoing process; we are implementing our program with determination and we will succeed," said Şimşek.

Prices for food and non-alcoholic beverages grew by 67.16%, easing from a 72% pace in October.

Data showed that charges for hotels, cafes and restaurants surged by 92.86%.

Health costs advanced by 82.13%, and those for transportation increased by 70.04%.

Monthly CPI was driven by an 11% jump in housing-related costs, while clothing and transportation costs were nearly flat, the data showed.

Concern autos will become less affordable due to rising prices and the ongoing Turkish lira depreciation, which has driven sales to an annual record, up 60.8% in the January-November period, trade association data showed on Monday.

The domestic producer price index was up 2.81% month-over-month in November for an annual rise of 42.25%.

The latest run-up in inflation began in July on the back of tax hikes and a sharp decline in the lira following the May elections.

Last month, the central bank said tightening would be completed in a short period.

It said domestic demand appears to be moderating; however, its existing high level, along with stickiness in service prices and geopolitical risks, keep inflation pressures alive.

The data "adds to evidence that inflation pressures in the economy continue to cool," said Liam Peach, senior emerging markets economist at Capital Economics.

Peach added that the central bank’s monetary tightening cycle is likely to come to an end with one final interest rate hike at the meeting later this month.

In October, annual inflation dipped for the first time in three months to 61.36%. The rate peaked at 85.51% in October 2022.

Analysts are penciling in a final rate hike of 2.5 percentage points at the central bank’s next policy meeting on Dec. 21.

The latest batch of data shows higher borrowing costs starting to slow down consumption – a key goal of the central bank.

Türkiye’s gross domestic product (GDP) rose by 0.3% between July and September. It had been increased by 3.3% between April and June.

The economy expanded by a more-than-expected 5.9% in July-September compared to a year ago, driven by household spending.

"The central bank will welcome these figures as evidence that demand is cooling and inflation pressures continue to soften," Peach said.

"However, bringing inflation down to much lower levels will require monetary policy to remain tight for a prolonged period. We expect the central bank to leave interest rates unchanged throughout 2024," Peach said.

S&P Global Ratings revised Türkiye’s long-term sovereign credit rating to positive from stable last week.

"Inflation appears to have peaked, albeit at elevated levels of over 60%," the ratings agency said with a warning: "The policy reset will take at least two years to tame inflation."