Turkey's annual inflation edges up to 29.77 percent in October

The 12-month average, used to calculate rent increases, fell to 31.23 percent from 31.49 percent in September, TurkStat data showed. Prices were 27.52 percent higher than in December 2025, and September's 29.73 percent was the first reading below 30 percent since November 2021.

A second month under 30 percent, but the monthly rate jumps

Both readings came in above forecast. Annual inflation beat a 29.56 percent consensus and the monthly print beat a 2.4 percent Reuters poll, Finimize reported.

Turkey remained among the five countries with the highest annual inflation rates worldwide, Bianet reported, behind Venezuela at 466 percent, Iran at 87.9 percent, South Sudan at 58.21 percent and Argentina at 33.4 percent.

Clothing and fresh food drove the monthly jump

Clothing and footwear rose 12.58 percent on the month, the largest increase among the main spending categories, Bianet reported. Food and non-alcoholic beverages rose 3.50 percent and added 0.84 percentage points to monthly inflation, against 0.36 points from transport and 0.34 points from housing. In September food cut 0.05 points from the monthly reading, Hürriyet Daily News reported. Fresh fruit and vegetables jumped 14.66 percent, and fresh or chilled leafy and stem vegetables 71.79 percent. On an annual basis, food inflation was 27.73 percent, up from 27.62 percent in September, while housing rose 40.24 percent from 39.99 percent and transport 36.39 percent from 35.1 percent, Trading Economics reported. Education posted the highest annual increase at 48.86 percent, followed by health at 43.29 percent, Bianet reported. Energy prices rose 4.92 percent on the month and 51.37 percent year on year, with diesel up 76.59 percent. Prices rose in 134 of the 174 subclasses TurkStat tracks, fell in 29 and were unchanged in 11.

Rate cut leaves a six-point cushion

The CBRT cut its benchmark to 36 percent from 37 percent on 22 October, its first reduction in nine months. With inflation at 29.77 percent, the policy rate leaves a real cushion of roughly six percentage points, which Finimize called not a large one if price growth stays sticky. The lira traded around 49.9975 per dollar after the release, and producer prices rose 1.65 percent on the month and 27.41 percent year on year, Finimize reported. The CBRT raised its end-2026 inflation forecast to 28 percent on 13 August, and the government raised its own year-end forecast to 28.4 percent in September.

Before October, the central bank had last cut in January, from 38 percent to 37 percent, then held at five consecutive meetings. The October statement said underlying inflation was slowing and domestic demand remained weak, while geopolitical tensions were keeping energy prices high. Trading Economics said the October figure raises doubts about another rate cut before year-end.

IntelliNews pointed to another constraint on further easing: the CBRT's net foreign exchange position deteriorated by more than $20bn from September, mostly on portfolio outflows. The dollar-basis annualised carry trade return Turkey offers has fallen below 10 percent, from above 20 percent at the start of 2026, as monthly lira depreciation accelerated to 1.8 percent from 1.5 percent in May.

What happens next

The CBRT publishes its next quarterly inflation report on 12 November and holds its last rate-setting meeting of the year on 10 December, with market consensus pointing to another 100 basis point cut, IntelliNews reported. The bank will have November inflation data in hand before that decision. The October statement made no commitment to further cuts, saying future decisions would depend on inflation data and expectations, and that it would tighten policy if the outlook worsened significantly and persistently.

The CBRT's medium-term inflation target remains 5 percent, far below the 28 percent forecast for end-2026.