Turkey’s annual inflation rate dropped to 44.4 percent in December 2024, marking its lowest level in 18 months, according to data released by the Turkish Statistical Institute (TurkStat).
The report highlights a consistent trend, as this marks the seventh consecutive monthly decline following a series of interest rate cuts by the central bank.
Consumer prices recorded a modest 1.03 percent increase month-on-month in December. The main contributors to the rise were expenses related to education, housing, and restaurants. Meanwhile, inflation in the food and non-alcoholic beverage sector eased, falling from 48.57 percent to 43.58 percent.
In a notable move, Turkey’s central bank reduced its key lending rate by 250 basis points on December 26, bringing it down to 47.5 percent from the 50 percent maintained since March. The decision to cut rates by such a significant margin was widely anticipated.
Economist Mustafa Sönmez commented on the move, telling AGBI:
“There had been considerable pressure from the business community to reduce borrowing costs. However, I doubt that commercial banks will swiftly follow suit by lowering their loan rates.”
President Recep Tayyip Erdoğan previously announced plans for additional interest rate cuts in 2025 as part of broader efforts to tame inflation.
Finance Minister Mehmet Şimşek also weighed in on the issue, stating on the social platform X:
“The decline in inflation will continue due to the delayed effects of monetary policy, stronger public financial support, and structural reforms aimed at increasing supply.”
