The decline in annual inflation continued for a fourth month in a row, easing from 51.97% in August to 49.38% in September, data from the Turkish Statistical Institute (TÜİK) showed on Oct. 3. This marked the lowest annual inflation rate since July 2023.

Food and non-alcoholic beverage prices were up 2.48% monthly, which brought the annual food inflation to 43.7%. Housing prices rose 3.86% for an annualized increase of 97.87%, while education costs surged 14.2% month-on-month and 93.6% year-on-year.

Clothing prices rose by 3.6% in August, while transportation costs were up 2.4%, but communication prices fell 0.8 percent month-on-month. Alcoholic beverages and tobacco prices increased 4.2% monthly in September.

The annual inflation rate is now below the Central Bank’s policy rate, which is currently at 50 percent.

As disinflation continues, some analysts think the bank is likely to move to reduce the policy rate – the one-week repo auction rate – by the end of this year, some even predicting a cut as early as November.

The bank in September left its policy rate unchanged for the sixth month in a row.

In a statement accompanying its rate decision, the bank said on Sept. 19 that “monetary policy tools will be used effectively in case a significant and persistent deterioration in inflation is foreseen.”

In previous statements released after the rate decisions, the bank emphasized that “monetary policy stance will be tightened in case a significant and persistent deterioration in inflation is foreseen.”

This alteration in guidance led some analysts to believe that the bank is likely to deliver a rate cut by the end of 2024. The government’s inflation forecast for 2024 is 41.5 percent.