Turkish inflation is forecast to have fallen drastically in September, hitting single digits for the first time in more than two years, mostly thanks to high base effect, according to multiple surveys. Consumer prices in Turkey went up by 15.01% in August compared to the same month last year, according to Turkish Statistical Institute (TurkStat) data. August's figure was down from 16.65% in July, beating expectations. In August, consumer prices in Turkey rose by 0.86% on a monthly basis. The statistical body will release September's consumer price index tomorrow. Consumer prices are expected to rise 9.64% year-on-year in September, according to an Anadolu Agency (AA) survey Tuesday. A group of 14 economists forecast monthly inflation of 1.34%, with predictions varying between 0.98% and 1.65%.

A group of 14 economists forecast monthly inflation of 1.34%, with predictions varying between 0.98% and 1.65%.

According to Bloomberg, on the other hand, inflation probably fell to 9.8%, reflecting base effects.

The median estimate for September's annual inflation in the Reuters poll of 15 economists stood at 9.6%, with estimates ranging between 10.6% and 9.1%.

On the other hand, the median estimate for the monthly inflation rate stood at 1.3% with forecasts between 2.25% and 0.8%.

In case of scenarios revealed in aforementioned surveys, inflation will be dropping to single digits for the first time since July 2017.

In the minutes of its Sept. 12 Monetary Policy Committee meeting, the Central Bank of the Republic of Turkey (CBRT) said inflation will fall significantly in September due to the high base from the previous year, with leading indicators suggesting the slowdown in annual food inflation will continue.

According to economists' average year-end estimates, annual inflation would be 12.99% – with the lowest estimate at 9.8% and the highest at 13.93%.

Under Turkey's new economic program announced by the government on Monday, the country's inflation rate target is 12% this year, 8.5% next year and 6% in 2021. At the end of this July, the CBRT lowered the country's year-end inflation forecast to 13.9%, down from its previous forecast of 14.6%.

As noted in the bank's latest inflation report, the figure will fluctuate between 11.5% and 16.3% through the end of 2019.

Over the last decade, annual inflation saw its lowest level at 3.99% in March 2011, while it peaked at 25.24% in October 2018.

In the face of rising inflation, the CBRT increased the interest rates to 24% in September 2018, from 17.75% at the time.

Steps taken in the past year, the downward trend in inflationary pressures, the global appetite for lower interest rates at leading central banks and the ameliorating economic activity in Turkey all enabled the bank to ease its monetary policy.

In its July meeting, the bank cut the benchmark interest rate, the one-week repo rate, massively by 425 basis points to 19.75%. In its latest monetary policy meeting on Sept. 12, the bank again cut the key rate by 3.25% to 16.50%, a decision that surpassed the median expectation for 275 basis points.

Bloomberg Economics, which estimates that inflation is likely to bottom out in October, sees room for interest rates to fall by a further 50 basis points this year.