Consumer Prices Continue to Decline: Turkey's Inflation Rate Drops Below 40 Percent

In Turkey, the rise in consumer prices has shown signs of moderation, with the inflation rate falling to 39.05 percent year-on-year in February, according to data released by the Turkish Statistical Institute. This marks the first time since June 2023 that the inflation rate has dipped below the 40 percent threshold, reflecting a continued easing of price increases for the ninth consecutive month.

In January, the inflation rate was recorded at 42.1 percent. Month-over-month, consumer prices rose by 2.3 percent, driven primarily by significant price hikes in sectors such as education, housing, healthcare, and the hospitality industry.

Turkey has experienced a prolonged period of double-digit inflation for nearly five years, peaking at 75 percent in May 2024 before beginning a gradual decline. However, these official inflation figures have been met with skepticism from independent economists. The Inflation Research Group, Enag, estimates that the actual year-on-year increase in prices for February could be as high as 79.5 percent.

The Central Bank of Turkey initiated interest rate hikes in the previous year as part of its strategy to combat inflation. This decision came after President Recep Tayyip Erdogan had resisted implementing a stricter monetary policy despite soaring inflation rates, aligning with conventional economic wisdom. Currently, the benchmark interest rate stands at 45 percent.

As Turkey continues to navigate its economic challenges, analysts are closely monitoring the effects of these monetary policies on the overall economic landscape and the potential implications for consumer purchasing power.