Annual inflation in Türkiye eased for the fourth consecutive month in January, while monthly consumer price growth saw a stronger-than-expected uptick that officials attributed to "seasonal factors" and one-off adjustments.
The rate of annual inflation cooled to 30.65% from 30.9% in December, the lowest annual reading since November 2021, the Turkish Statistical Institute (TurkStat) said on Tuesday, with food, transport and housing the main contributors to rising prices.
Monthly inflation accelerated to 4.8% from 0.9% in December, driven in part by new year price adjustments and a jump in food and non-alcoholic drinks prices.
Surveys expected inflation to be about 4.32%, while the annual rate was seen at 30%.
Treasury and Finance Minister Mehmet Şimşek said food prices and seasonal factors played a role in the rise of January inflation. But he stressed these factors would have a "limited" impact on the underlying trend of inflation, vowing to continue disinflationary policies with determination.
"In the January inflation realization, food prices, which increased significantly above the long-term average due to adverse weather conditions, and seasonal factors were the decisive factors," Şimşek wrote on the social media platform X.
Economists expected monthly inflation to be high due to the impact of the 27% increase in the minimum wage on the service and production sectors, alongside the price hikes implemented for various products at the start of the year.
The Central Bank of the Republic of Türkiye (CBRT) had also pointed out that inflation would rise in January, led by food prices.
According to the TurkStat data, food and non‑alcoholic beverages rose 6.59% on a monthly basis, contributing 1.61 points to the overall monthly change. Transport prices increased 5.29% and housing costs were up 4.43%, with these categories adding 0.88 and 0.51 points to the monthly inflation print, respectively.
Year-over-year, the steepest price increases were recorded in education (64.7%), housing (45.4%) and food (31.7%).
Vice President Cevdet Yılmaz said the government's policy framework remains focused on bringing inflation down to single digits and that the recent spike would have a temporary impact.
"Although seasonal developments have the potential to exert short-term positive or negative effects on inflation, the main direction and course of our program is to bring our country to single-digit inflation figures," Yılmaz said on X.
To achieve the goal, he said authorities are executing monetary, fiscal, and incomes policies in an "effective and coordinated manner, while accelerating structural reforms that support the disinflation process."
"In addition to rebalancing demand, normalizing pricing behavior and improving expectations, we will continue to support the decline in inflation through supply-side policies targeting food, social housing, logistics, energy and human capital."
In January, the CBRT lowered its key interest rate by a less-than-expected 100 basis points to 37%, citing firming inflation and pricing behavior and expectations that threatened the disinflation process.
After a brief policy reversal early last year, the bank's rate-cutting cycle resumed in July with a 300-basis-point move, followed by cuts of 250 points and then 100 points in October amid rising food prices, before the last two cuts of 150 points in December, then 100 points in January.
The CBRT expects inflation to fall to its 16% interim target by the end of 2026, with a projected range of 13%-19%. Markets will closely follow the first inflation report of the year that the bank is scheduled to release next week.
Market surveys estimate inflation will decline to about 23% by year-end.
Tuesday's TurkStat data, meanwhile, also showed the domestic producer price index rose 2.67% month-over-month in January for an annual increase of 27.17%.