Turkey Inflation Rate Cools to 32.95% in August

Turkey's annual inflation rate slightly eased to just below 33% in August, with the consumer price index rising 32.95% year-on-year, reflecting a continued cooling trend since May 2024. Despite this easing, inflation slowed less than expected, indicating resilient consumer demand amid ongoing interest rate cuts by the central bank, which lowered its key policy rate to 43% in July. In Istanbul, consumer price growth also moderated, rising 1.8% monthly and 40.83% year-over-year, with education-related expenses notably increasing due to the new academic year, while clothing and footwear prices declined. Meanwhile, Estonia experienced the highest inflation rate in the euro area at 6.2% year-on-year in August, driven by VAT hikes, electricity price increases, and food costs, with inflation expected to slow yet remain above the eurozone average. Hungary’s producer inflation also slowed in July to 4.5%, its lowest since October 2024, due to moderated prices in energy and mining sectors, despite some increased manufacturing costs. These developments highlight a mixed inflationary landscape across Europe and Turkey, with easing trends tempered by sector-specific price pressures and policy adjustments.