Official data released on Monday shows Turkey's annual inflation rate continued its downward trend in December, slowing to 30.9 percent. This marks the fourth consecutive month of decline and represents a significant drop from the 44.4 percent recorded in the same month a year earlier.
Key Figures and Annual Averages
According to Turkey's official statistics agency, TUIK, the 12-month annual average inflation for the entirety of 2025 stood at 34.9 percent. This is a substantial decrease from the 58.5 percent average witnessed in 2024. The December figure of 30.9 percent aligns with the expectations of Turkey's central bank, which had projected year-end inflation to be around 31 to 33 percent.
The current inflation level is the lowest Turkey has seen since November 2021. This follows a peak of 75 percent in May 2024, after which prices began a steady fall. Despite the recent cooling, the nation has been grappling with double-digit inflation consistently since 2019, severely impacting the cost of living for millions.
Sector-Wise Price Hikes and Disputed Data
The TUIK breakdown reveals where consumers felt the pinch most acutely over the past year. Education costs surged by a staggering 66 percent, while housing expenses rose by 49.5 percent. Healthcare became more expensive by 30.1 percent, and food prices increased by 28.3 percent.
However, the official figures are contested by ENAG, a group of independent economists. ENAG, which publishes its own monthly data, claims the year-on-year inflation for December was significantly higher at 56.14 percent. The group also reported that month-on-month, prices rose by 2.11 percent in December compared to November.
Central Bank Policy and Future Risks
In response to the slowing inflation trend, Turkey's central bank last month reduced its benchmark interest rate to 38 percent from 39.5 percent. This monetary policy shift comes after a period where President Recep Tayyip Erdogan advocated for interest rate cuts to stimulate economic growth, a strategy that many economists blame for fuelling the prolonged inflationary crisis.
Despite the positive signs of disinflation, the central bank has issued a cautionary note. It warned that inflation expectations and pricing behaviour in the market continue to pose risks to the ongoing process of bringing inflation under control. The bank's statement suggests the path to price stability remains fragile.
