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Turkish inflation accelerated for a second month in July driven by food and energy costs, reducing the likelihood of a summer interest-rate cut sought by the president.

Consumer price gains climbed to 18.95% from 17.53% in June, more than the median estimate of 18.6% in a Bloomberg survey of 21 analysts. Prices rose 1.8% from June.

Key Insights

  • Energy prices rose 21.51% from a year earlier, compared with 17.3% in June, due to higher oil prices, adding to the odds of further spillover into other goods and services inflation
  • A core inflation index showed prices excluding volatile items such as food and energy also rose an annual 17.22%, down from 17.5% during the same period, a sign of strong inflationary pressures underlying the headline figure
  • Food prices, which account for roughly a quarter of the consumer basket, rose 24.92%, compared with 20% the previous month, well above the central bank’s year-end prediction of 15%


  • The lira erased gains after the data was released, trading at 8.3557 per dollar at 10:04 a.m. in Istanbul

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  • Retail inflation in Istanbul, Turkey’s business capital, accelerated to 17.38% in July from 16.12% in June
  • Producer prices rose an annual 44.92% through last month, highlighting risks to inflation outlook from cost pressures
  • Faster price gains narrowed the gap between the central bank’s benchmark rate of one-week repo and consumer inflation to 5 basis points, constraining the central bank’s ability to lower borrowing costs

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