Turkiye’s Inflation Eased to 31.1% y/y in November, Hitting Below Expectations
Bottom line: According to Turkish Statistical Institute’s (TUIK) announcement on December 3, Turkiye’s inflation softened to 31.1% y/y in November backed by moderate unprocessed food prices. We continue to think upside-tilted inflation risks will likely limit the downward trend during the disinflationary process in 2026.
Figure 1: CPI, Core Inflation (YoY, % Change) and Policy Rate (%), January 2015 – November 2025
After Turkiye’s annual inflation hit 32.9% y/y in October driven by higher services and food prices, the disinflation process resumed in November and inflation stood at 31.1% y/y in November marking the lowest in the last four years. More importantly, monthly inflation edged down a 30-month lowest to 0.87% in November.
According to TUIK’s announcement, education prices recorded the highest annual increase with 65.6% YoY followed by housing prices were up by 49.9%. Annual food and non-alcoholic beverages prices also edged up by 27.4% as the unprocessed food group dragged down food inflation. Prices rose at a slower pace across a number of categories, such as footwear and clothing, which came in at 9.0% YoY in November.
Core inflation surged by 1.2% MoM, bringing the annual rate to 31.6% while the monthly figure was helped by lower food prices, especially vegetables and fruits. TUIK data showed that domestic PPI rose 0.8% m/m in October for an annual rise of 27.2%.
Commenting on the inflation print, Treasury and Finance Minister Mehmet Simsek said on December 3 that “November print marked the lowest monthly inflation in the last 2.5 years, adding that he expected the moderate trend to continue in December.” Simsek added that some key factors would contribute to the disinflation process in 2026, including supportive global financial conditions and moderate commodity prices, tight monetary policy and strengthening financial stability.
The central bank's end-2025 inflation target stands at 24%, with its forecast range at 31%–33%. We expect the slowdown in inflation to continue, but with a slower pace in Q4 2025 and 2026 as the inflation will likely stay over the CBRT’s upper band at the end of the year.
We continue to envisage it will be (very) difficult to grind sticky inflation from 30%s to 10%s rapidly, taking into account that inflation becomes stickier requiring high interest to remain for some time. Our average inflation forecasts stand at 34.5% and 26.5% for 2025 and 2026, respectively, considering inflation expectations and pricing behavior remain fragile.