Turkish consumer price inflation rose to 1.84% month-on-month in August, just below expectations, while the annual figure was 31.51%, data from the Turkish Statistical Institute showed on Thursday.
In a Reuters poll, the monthly inflation rate was forecast to be 1.93% and the annual rate 31.62%, as rising oil prices driven by tension between Iran and the United States continue to pose an upward risk to inflation.
Price rises in August were led by education which rose more than 8%, alcoholic beverages and tobacco products which rose some 7%, and transportation which rose 4.8%.
In order to limit the impact of volatility in oil prices due to the Iran war, Türkiye removed a special consumption tax on diesel through the end of August, after which the tax will be gradually reinstated. Gasoline and liquefied petroleum gas will remain under a sliding-scale fuel tax system until October 1 to ease the rise in prices.
In July, consumer prices rose 1.78% month-on-month and 31.75% year-on-year.
Late last month, Türkiye's central bank resumed one-week repo auctions, which have been suspended since March in order to control the inflationary impact of the Iran war. Turkish lira overnight interest rates dropped to 37% from the previous 40%.
In August, Türkiye's central bank raised its inflation forecast for the end of 2026 to 28% from 26% driven by the developments in prices of diesel oil, natural gas, and some other commodities.
Economists slightly lowered their year-end inflation forecast to 29.5% in the August poll, still remaining above the central bank's projection.
Markets expect the central bank to leave its policy rate unchanged at its next meeting on September 10. However, investors are closely monitoring new tensions in the Iran war.
The data also showed the domestic producer index rose 2.57% month-on-month in August for an annual increase of 27.95%.
