June inflation: a summer respite of sorts

TURKEY - In Brief 03 Jul 2026 by Murat Ucer

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Consumer prices rose by 1.0%, m/m, in June, in line with the median market expectation. As a result, annual consumer price inflation eased slightly to 32.1%, from 32.6% in May. Monthly domestic PPI inflation was 1.8% in June, with the 12-month PPI rate thus declining also slightly to 28.1% from 28.9% in the previous month (see chart; table). In terms of contributions to monthly headline CPI inflation, compared to June 2025, transportation category was the main factor behind the moderation in inflation, though housing and education categories marginally contributed as well. Monthly food (and non-alcoholic beverage) inflation was subdued at just 0.2%, but the 12-month rate nevertheless edged up -- to 35.4% from 34.9% in May – on the back of higher processed food inflation (see charts). Turning to core indicators and service inflation, the C-index (the most widely monitored core measure) rose by 1.5%, m/m, in June, marking its lowest monthly reading since the beginning of the year. As a result, its 12-month rate declined to 29.8% from 30.4% a month earlier. The B-index --another closely watched core measure, which leaves in processed food and non-alcoholic beverages-- rose by 1.7%, m/m, as its annual rate barely declined – to 31.2% from 31.3% in May.  Finally, service prices rose by 1.7%, m/m, lowering the annual service inflation to 39.7% in June from 41.1% in May (see table; charts). The bottom line is that, while there are some moderate signs of respite in today’s inflation print, the slow pace of the decline in annual inflation rates, our rough calculations that adjust for seasonality in core inflation rates --recall that Turkstat numbers will be available on Monday--...