Turkey govt sees 2025 year-end inflation at 28.5%; saw 17.5%

Turkey govt sees 2025 year-end inflation at 28.5%; saw 17.5%

Turkey's inflation rate has been a subject of significant interest and concern for investors and financial professionals alike. According to the latest data, the Turkish economy saw a marked decrease in inflation rates in 2025, with annual inflation easing from 35.41% in May to 33.52% in July [2]. This trend is particularly notable given the historical context of Turkey's inflation rates, which have been volatile and often high.

The Turkish Statistical Institute reported that the annual inflation rate in Turkey slowed to 35.41% in May 2025, marking a year-long easing in consumer inflation [3]. This was driven by a slowdown in various sectors, including food and non-alcoholic beverages, housing and utilities, and health services. The core inflation rate also dropped to 35.37%, indicating a broader-based slowdown in price growth.

However, despite these improvements, the Turkish government has projected that the year-end inflation rate for 2025 will be 28.5%, a significant decrease from the 17.5% inflation rate seen in 2024 [1]. This projection suggests that while the economy has shown signs of improvement, high inflation remains a challenge.

The Turkish economy has been grappling with nearly two years of monetary tightening, which pushed borrowing costs as high as 50%. However, the central bank began cutting interest rates in December, which has had a positive impact on the economy. The GDP growth rate in Turkey expanded 4.8% year-on-year in Q2 2025, driven by stronger household consumption, investment, and exports [3].

The Turkish government and central bank have been working together to manage inflation and stabilize the economy. The central bank has been using various tools, including policy rates and measures to protect the value of the baht, to keep inflation within the target framework. The Finance Ministry and the Monetary Policy Committee (MPC) of the BOT have also agreed to hold regular consultations to coordinate fiscal and monetary policies [1].

In conclusion, while Turkey's inflation rate has shown signs of improvement in 2025, high inflation remains a challenge. The government's projection of a 28.5% inflation rate by the end of the year suggests that the economy is still facing significant headwinds. However, the positive GDP growth rate in Q2 2025 indicates that the economy is showing signs of recovery, and the coordinated efforts between the government and the central bank may help to stabilize the economy further.

References:
[1] https://www.nationthailand.com/business/economy/40044527
[2] https://tradingeconomics.com/turkey/inflation-cpi
[3] https://tradingeconomics.com/turkey/gdp-growth-annual