In the Summary of the Monetary Policy Committee Meeting of the Central Bank of the Republic of Turkey (CBRT), it was stated that the high and volatile course of energy prices continues as a result of increasing uncertainties due to geopolitical developments, and added: "The duration and extent of uncertainties regarding energy supply, supply chains and transportation costs will continue to be decisive for the future course of energy prices." statements were included.
The summary of the meeting of the CBRT Monetary Policy Committee on September 10 has been published.
In the summary, "The high and volatile course of energy prices continues as a result of increasing uncertainties due to geopolitical developments. The duration and extent of uncertainties regarding energy supply, supply chains and transportation costs will continue to be decisive for the future course of energy prices." statements were included.
On the other hand, it was stated in the summary that there was an increase in agricultural commodity prices due to adverse weather conditions and geopolitical developments, and that this situation emerged as another upward risk factor on inflation developments and expectations.
In the summary, it was noted that the negative growth outlook for 2026 continues in the Middle East and African countries due to the impact of geopolitical developments.
On the other hand, the summary stated that growth rates are expected to recover with the introduction of base effects in 2027 and included the following statements:
"In this context, it is estimated that the weak and fragile outlook will continue on a global scale, and the global growth index, weighted by the export shares of Turkey's foreign trade partners, will increase by 1.6 percent for 2026 and 2.5 percent for 2027."
"Upside risks to global inflation continue"
In the summary, it was stated that the upward risks on global inflation continue due to the volatility in commodity prices.
The summary emphasized that while central banks continue to monitor the risks in question, they also take into account the negative effects of developments on growth and employment, and included the following evaluations:
"Policy rate pricing indicates that expectations for interest rate hikes are maintained in developed countries. How permanent the supply shock caused by geopolitical developments and adverse global weather conditions caused by climate events such as El Niño will be and to what extent it will disrupt inflation expectations is important for the course of global monetary policies. Recently, due to increasing uncertainty and fluctuations in risk appetite, fund outflows from developing country stock markets have been observed, while downside risks on portfolio movements remain alive."
In the summary, it was stated that when evaluated in terms of production, all items except construction contributed positively to annual growth in the second quarter, while the main determinant of growth was the services sector.
In the summary, it was reported that the agricultural added value increased strongly in the second quarter after the first quarter's annual growth, and that the industrial value added, which decreased in the first quarter on an annual basis, increased in the second quarter.
Final domestic demand continues to drive annual growth
In the summary, it was stated that when examined by expenditure method, final domestic demand continued to be the driver of annual growth.
In the summary, it was stated that the positive contribution of private consumption and total investments to annual growth decreased slightly compared to the previous quarter, and that the decrease in private consumption expenditures on a quarterly basis grew in the second quarter, indicating a significant slowdown in consumption.
In the summary, it was stated that total investments did not change on a quarterly basis in this period.
In the summary, it was emphasized that while exports of goods and services increased, imports decreased and net exports made a positive contribution to quarterly growth, it was stated that the second quarter data indicated that the weak course of domestic demand had become evident.
In the summary, the following was noted:
"It is evaluated that the effects of recent geopolitical developments on the current account deficit will be shaped largely depending on the course of developments in energy prices. Seasonally adjusted imports of consumer goods increased slightly in July-August after declining in the second quarter of the year. When the temporary foreign trade data for August and the high-frequency leading data for September are evaluated together, the three-month average trends show a decrease in exports and imports, as well as a decrease in the foreign trade deficit compared to the second quarter of the year. points out.”
In the summary, it was stated that consumer prices increased by 1.84 percent in August and annual inflation decreased by 0.24 points to 31.51 percent, and it was noted that in this period, increasing energy prices due to geopolitical developments and its reflections on transportation services, as well as education and communication services, came to the fore on consumer inflation.
In the summary, it was stated that annual inflation increased in energy, alcohol-tobacco-gold and services groups, especially in the energy group, and decreased in other main groups. "The annual rate of change of the B index (CPI excluding energy, unprocessed food products, alcoholic beverages and tobacco and gold) is 30.68 percent, with a decrease of 0.30 points; the annual rate of change of the C index (CPI excluding energy, food and non-alcoholic beverages, alcoholic beverages, tobacco products and gold) is 30.68 percent, with an increase of 0.16 points." It became 30.07." It was said.
The following statements were included in the summary:
"When the contributions to annual consumer inflation are examined, the contributions of food, non-alcoholic beverages and basic goods groups decreased by 0.81 and 0.32 points, respectively, compared to the previous month, while the contributions of services, energy and alcohol-tobacco-gold groups increased by 0.43, 0.40 and 0.06 points, respectively. In August, the high monthly increase of 5.46 percent in energy prices was determined by the rising fuel prices due to the developments in international oil prices." The effects of the increase in refinery margins were also felt on diesel prices. In August, monthly inflation in the services group remained high, led by communication and transportation services. Prices increased in the alcoholic beverages and tobacco group, along with the lingering effect of the tax regulation in July. In August, the unprocessed food subgroup, whose prices decreased, led by fresh fruit and vegetable products, was relatively high. "While prices in the core goods group decreased with seasonal discounts in the clothing and footwear subgroup, they continued their moderate course in goods other than clothing."
In the summary, it was noted that with seasonally adjusted data, the monthly increase in consumer prices remained flat in total and in the B index, while it decreased in the C index.
It was stated that the seasonally adjusted price increases weakened in basic goods among the groups that make up the B index and remained relatively flat in the service sector, and said, "It increased in processed food. According to the indicators followed by the CBRT, the main trend of consumer inflation showed a limited increase in August after the decrease in July. The indicators continued their downward trend on the basis of three-month averages." It was said.
In the summary, it was stated that as of August, seasonally adjusted inflation on the basis of three-month averages remained flat in the services sector compared to the previous month, while it decreased in core goods.
In the summary, it was evaluated that the weak course of demand conditions limited the main trend of inflation despite the supply-side shocks originating from geopolitical developments, and it was stated that the pricing behavior prevailing in the service sector caused a significant inertia and the effects of shocks on inflation to spread over a long period of time, and services inflation remained higher than that of goods.
In the summary, the following evaluations were made:
"As of August, annual goods inflation is around 26 percent and services inflation is around 40 percent. When services inflation is examined on a subgroup basis, annual inflation increased in communications, transportation and other services, while it decreased in rent and restaurant and hotel groups. In August, monthly inflation increased by 3.22 percent in the other services group, and in this subgroup, the effect of the price developments in education services as well as the announcement of tuition fees in August this year, unlike the previous year, was felt. Education prices, foundation It increased by 8.62 percent due to the increase in higher education institutions' fees. It is observed that the university tuition fee increases, which occurred all at once in September in the previous year, depending on the registration period, spread to the August-September period this year. It should be noted that this development will affect the service sector inflation upwards in August and downwards in September.
Developments in mobile phone call charges were effective in the 5.03 percent increase in communication services prices. Transport services inflation, which had an upward trend due to fuel price developments, strengthened by 4.98 percent in August. During this period, air transportation services became the main item that came to the fore. Although monthly rent inflation increased slightly to 3.04 percent due to seasonal effects in the contract renewal rate, it continued to slow down on an annual basis. During this period, the slowdown in rent inflation adjusted for seasonal effects became evident. "The restaurant-hotel group continued its moderate course."
In the summary, it was reminded that domestic producer prices increased by 2.57 percent in August and annual producer inflation increased by 0.12 points to 27.95 percent.
In the summary, it was stated that energy prices continued to stand out among the main industrial groups with an increase of 6.99 percent in this period, and it was shared that the prices of durable consumer goods (except jewelery) increased by 2.01 percent, while the increases in other main industrial groups were in the range of 1.5-1.8 percent.
When examined on a sectoral basis, refined petroleum products, tobacco, coal-lignite, metal ore and electricity were the subgroups that stood out with price increases.
It was stated that international commodity prices increased in August due to the increases in energy, agricultural commodity and industrial metal prices, and said, "As of the first 10 days of September, a significant increase in energy commodity prices was observed due to the developments in the Strait of Hormuz, while the increase in agricultural commodity prices continues. The high volatility in Brent crude oil prices continues." It was said.
In the summary, it was reported that Brent crude oil prices, which decreased in June, reached 91 dollars in August with the geopolitical tension that increased again in July, and reached an average level of 103 dollars as of the first 10 days of September.
Similarly, it was stated in the summary that TTF natural gas prices continued to rise, and that gold prices displayed a relatively horizontal outlook as of the first 10 days of September, following the increase observed in August.
In the summary, it was stated that uncertainties regarding geopolitical developments created inflationary pressure on a global scale by increasing commodity prices, especially energy, and causing interruptions in the flow of raw materials, and the following was noted:
"FAO food price index increased to a limited extent in July, led by sugar and grain prices. On the other hand, prices of some grain products have recently tended to rise due to supply concerns as a result of the increased tension between Russia and Ukraine. As a result of the El Niño climate event, prices of some agricultural commodities such as rice, sugar, coffee and cocoa are increasing; upside risks are becoming evident in products such as some vegetable oils and corn. In short, climatic events and global supply concerns cause price pressures in some food products. This situation poses upside risks to animal production costs.
The Global Supply Chain Pressure Index, which was significantly above its historical average in April and May due to geopolitical developments, continued to remain above its historical average, although it declined in the following period. With the geopolitical developments, risks arising from the Strait of Hormuz continue to exist, and global freight costs remain negative. The rise observed in global and Chinese container indices since March continued as of the first 10 days of September. Dry cargo indices also recorded high increases in August and the first ten days of September. In addition, while the increase in the exchange rate basket increased slightly in August due to the impact of euro/dollar parity developments, it remained moderate as of the first ten days of September. "Seasonally adjusted manufacturing industry PMI data indicated an increase in input and product price indices in August and a partial deterioration in delivery times."
“High energy prices pose an upside risk to the inflation outlook.”
In the summary, it was noted that there was a general increase in sectoral inflation expectations in August.
According to the results of the Market Participants Survey, the 2026 year-end inflation expectation increased by 0.2 points to 29.4 percent, the 2027 year-end inflation expectation increased by 0.5 points to 21.9 percent, the 12-month inflation expectation decreased by 0.3 points to 23.7 percent, and the 24-month inflation expectation increased by 0.2 points to 18 percent. was stated.
In the summary, it was stated that the inflation expectation for the next 5 years was realized at the level of 11.1 percent with a decrease of 0.4 points. "When we look at the real sector expectations, the annual inflation expectation of the companies for the next 12 months was measured at the level of 32.8 percent with an increase of 0.3 points in August. In the same period, households' inflation expectations for the next 12 months increased by 0.6 points and reached 45.6 percent. "Inflation expectations and pricing behaviors continue to be a risk factor in terms of the disinflation process."
In the summary, it was emphasized that despite monthly fluctuations, recent inflation realizations and leading indicators indicate that the main trend of inflation has decreased, and it was reported that the rise of the main trend in August was also affected by the fact that the foundation university fee increases, which were fully realized in September the previous year, were divided into August and September this year, and the shift of tuition fees to August this year instead of November.
In the summary, it was stated that while this shift would increase August inflation by approximately 0.25 points, it would mechanically reduce September inflation due to education services, and added: "Therefore, it should be noted that the mentioned service items, which occur in different months compared to last year, will create upward mechanical effects on the main trend in August and downward mechanical effects in September."
