HOLA, ISTANBUL!
Anticipated monthly inflation rate decrease to 2.1% in May's forecast.
Economists, polled by the Anadolu Agency, reckon May's monthly inflation could hit around 2.1%, with a swing of 1.8% to 2.75% expected among the 23 surveyed individuals. Last month, consumer prices surged 3% month-on-month1.
Embrace the new numbers! Based on the average inflation projection for May, the annual rate that stood at a whopping 37.86% in April, is expected to dive to 36.17%1.
By the end of 2025, economists predict inflation to hover around the 31.17% mark1. Keeping the past in mind, the central bank had initially projected 2025's inflation to be 24%, and the end-of-2026 forecast to stay at 12%1.
In the bank's recent quarterly inflation report, Governor Fatih Karahan emphasized that they'd stick to the "decisive monetary policy stance" and take measures to accelerate the disinflation process1. There's a glimmer of hope as he assured that the medium-term forecasts were formulated considering an environment where tight monetary policies remain in play until a significant and sustainable fall in inflation is achieved1.
Now, let's talk about inflation35. As of this May 2025, Istanbul registers an annual inflation rate of 46.57%, a sliver lower than the 47.21% witnessed the previous month3. Monthly inflation for May nudged up to 2.83%, a clear indication that inflationary pressures persist5.
While the central bank hasn't spilled its beans about specific inflation forecasts for 2025, 2026, and the medium term, general trends hint that inflation is on its way down3. Official data indicates that Turkey as a whole, experienced a drop in inflation to 35.41% in May 2025, with further declines expected3. Economists are speculating that inflation could end up around 30% by the end of 20254, above the central bank's anticipation of 24%4. Alas, no specific figures are available for the central bank's forecasts for 2026 and the medium term.
However, the easing inflation might play a part in policy decisions, potentially nudging toward interest rate reductions. The momentous interest rates currently in play serve the tight monetary policy designed to smother inflation4. As long as inflation continues to slump, there's a mounting sense of optimism that the central bank will give the economy a bit of a break by gradually reducing interest rates4, which could influence economic conditions in Istanbul and Turkey as a whole.
- The projected annual inflation rate for May in Istanbul's general-news suggests a decrease from April's staggering rate, indicating a potential shift in business and personal-finance investments as the finance industry keeps an eye on policy-and-legislation changes.
- As the central bank adheres to a "decisive monetary policy stance" to combat inflation, wealth-management firms in Istanbul's industry may reconsider their investing strategies, hoping for a more stable economic environment.
- The persistent increase in inflation, despite the central bank's efforts, could have significant implications for politics, as policy-and-legislation decisions may have to accommodate the ongoing financial challenges faced by businesses and individuals.
- If the inflationary pressures persist, the general-news headlines in Istanbul could shift from the declining inflation rates to discussions about the overall health of the business and finance industries, shedding light on potential economic ramifications for the city and Turkey as a whole.
