Türkiye's Inflation Falls Below 1% Monthly, Hits Four-Year Low

Türkiye has achieved a significant milestone in its economic program, with official data showing monthly inflation falling below 1% for the first time in 30 months. According to the Turkish Statistical Institute (TurkStat), the Consumer Price Index (CPI) rose by just 0.87% in November, while the annual inflation rate slowed to 31.07%, reaching its lowest point in four years.

Economic Context and Expert Analysis

The latest inflation figures, which came in below market expectations, are seen as a validation of the government's recent policy shift toward monetary tightening and fiscal discipline. Finance analyst Haluk Burumcekci noted that annual food price inflation slowed to 27.4%, driven largely by a decline in unprocessed food prices. "Inflation is expected to close the year at around 31%, so long as no shocks over exchange rates, wages, administered prices, and commodities come to the fore in December," he told Anadolu Agency. This disinflation trend is bolstering expectations for monetary easing.

Anticipated Central Bank Move and Market Response

With inflation pressures easing significantly, economists widely forecast that the Turkish Central Bank (TCMB) will reduce its policy rate at its December meeting. While estimates vary, a cut between 100 and 150 basis points is considered the base scenario, with some analysts not ruling out a more aggressive 200-point reduction. Associate Professor Filiz Eryilmaz stated, "The central bank is expected to cut rates by 150 basis points... but a 200-basis-point [cut] is also on the table." This expected pivot follows a cycle of aggressive rate hikes aimed at stabilizing the Turkish lira and curbing price rises.

Broader Financial Stability and Positive Indicators

The disinflation success is contributing to broader financial stability. The Central Bank's total reserves reached a record high of $198.4 billion in October, strengthening the lira's buffer against potential volatility. Furthermore, Türkiye's five-year credit default swap (CDS) — a key gauge of sovereign risk — has fallen to its lowest level since May 2018, signaling rising investor confidence. The current account balance has also remained in surplus for three consecutive months, supporting the nation's external financial position as it navigates a complex global economic landscape.