Commerzbank analyst Tatha Ghose commented on Turkey's June inflation data, noting that both the Consumer Price Index (CPI) and Producer Price Index (PPI) figures were better than expected as the impact of the recent energy shock diminished. Headline CPI slowed to 32.1% year-on-year, while PPI eased to 28.1% year-on-year. The seasonally adjusted monthly increase for both indices was 1.8% month-on-month, which translates to an underlying inflation momentum of approximately 24% on an annualized basis [1].
Ghose emphasized that, despite the improvement from previous months affected by the Iran-war spike, the current pace of price increases remains significantly above the Central Bank of the Republic of Türkiye's (CBRT) long-term inflation target of 5%. He stated, 'such a rate of fresh price increase is nowhere near a credible path towards single-digit inflation, let alone CBRT’s long-term 5% target' [1].
On the producer side, the PPI's monthly rise slowed to 1.8% from 2.8% in May, indicating some cooling in cost pressures. However, Ghose noted that this moderation is not yet sufficient to provide genuine disinflation support [1].
Overall, while the June data showed some improvement as the energy shock faded, underlying inflation remains too strong to offer meaningful relief for policymakers or to justify any easing of the CBRT's policy stance. Ghose concluded that the current inflation momentum limits the central bank's options for policy easing [1].
CONCLUSION
June's inflation data in Turkey showed improvement as energy pressures eased, but underlying inflation remains well above the central bank's target. According to Commerzbank, this persistent inflation momentum restricts the CBRT's ability to consider policy easing in the near term.