Central Bank report highlights mounting price pressures across all sectors

Turkey's Central Bank (TCMB) released its monthly inflation report this week, revealing a substantial surge in consumer prices for July. According to figures published by the Turkish Statistical Institute (TUIK), the Consumer Price Index (CPI) rose 9.49% over the previous month and 47.83% compared to July 2022.

The TCMB report analyzed the sharp increase, attributing it primarily to hikes in taxes, the declining value of the Turkish lira, and wage increases. The 9.49% monthly jump significantly exceeded typical July trends and pushed the annual inflation rate up by 9.62 percentage points to nearly 48%.

The report found rising prices across all major consumer groups, with energy prices seeing a particularly pronounced boost from tax adjustments, currency depreciation, and climbing international oil prices. Durable goods dependent on foreign inputs also remained a core driver of inflation.

In the services sector, price hikes were widespread across subgroups and strengthened over June's figures. Food prices also increased contrary to seasonal norms, led by fresh produce.

On the production side, producer price inflation maintained its rapid monthly climb. The TCMB's latest inflation report underscores the ongoing challenges of multiple factors, including taxes, exchange rates, labor costs, and global conditions. The data provides vital insights into Turkey's economic dynamics and inflation outlook as policymakers chart the country's monetary policy course. With annual inflation approaching 50%, dampening price rises remains a pressing priority for the central bank.