Turkish Inflation Stays Stubborn as Core Prices Top 31% and Housing Costs Surge

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Key Takeaways

• Turkish consumer prices climbed in June, with core inflation topping 31%, according to trend.az on July 9, 2026.
• Housing prices accounted for the biggest monthly CPI increase in Türkiye, as reported by trend.az on July 9, 2026.
• The IMF expects Turkish GDP to grow 2.9 percent in 2026, per Hürriyet Daily News on July 9, 2026.
• The IMF cut Türkiye’s 2026 growth forecast but sees a rebound in 2027, according to trend.az on July 11, 2026.
• The Central Bank of Turkey’s policy rate remains a key tool as inflation pressures persist.

The Data

ANKARA — Turkish consumer prices continued to climb in June, with core inflation topping 31%, according to a report by trend.az on July 9, 2026. The persistent price pressures underscore the challenge facing the Central Bank of Turkey as it tries to cool the economy.

Housing prices were the biggest driver of the monthly CPI increase in June, trend.az reported on July 9. Core inflation, which strips out volatile items like food and energy, remains well above the central bank’s target, signaling broad-based price pressures across the economy.

The Central Bank of Turkey has held its policy rate steady in recent months, awaiting clearer signs that inflation is easing. The next monetary policy decision is scheduled for later this month, and analysts expect the bank to maintain its cautious stance amid sticky inflation.

On the growth front, the International Monetary Fund (IMF) expects Turkish GDP to expand by 2.9 percent in 2026, according to Hürriyet Daily News on July 9. However, just two days later on July 11, trend.az reported that the IMF had cut its 2026 growth forecast for Türkiye, though it projects a rebound in 2027.

Labour market data for June has not yet been released by the Turkish Statistical Institute. Analysts will be watching for signs of whether the slowing economy is starting to weigh on employment.

Housing Costs Drive Inflation Spike

The biggest contributor to June’s CPI increase was housing prices, according to trend.az on July 9. Rents and home purchase costs have been rising rapidly, squeezing household budgets in major cities like Istanbul and Ankara.

This housing-led inflation is particularly painful for Turkish families, who already face high costs for food and transportation. The Central Bank of Turkey has noted that shelter costs are a key component of sticky services inflation that has been slow to respond to rate hikes.

What This Means

For households, rising housing costs mean higher rent and mortgage payments, eating into disposable income. With core inflation above 31%, real wages are being eroded, and families are finding it harder to afford basic necessities.

For businesses, borrowing costs remain high as the central bank keeps rates elevated to fight inflation. Input prices, especially for construction and real estate materials, are rising. The IMF’s lowered growth forecast suggests that companies may face weaker demand in the months ahead.

Outlook

The Central Bank of Turkey will release its next policy decision later this month. With core inflation still above 31%, analysts expect the bank to hold rates steady while monitoring the impact of past tightening. The Turkish Statistical Institute is due to publish July inflation data in early August.

The IMF’s revised forecast, which sees a rebound in 2027, suggests that policymakers expect the current slowdown to be temporary. However, risks remain high if housing costs and core inflation do not moderate in the coming months.

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Data sourced from Turkish Statistical Institute (TurkStat) and Central Bank of Turkey (TCMB). Analysis by Economic Pulse Data Team.

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Edited by Editorial Desk. Fact-checked by Editorial Desk. This is analysis, not financial advice.