Inflation surge

The decline in annual inflation continued for a fourth month in a row, easing from 51.97 percent in August to 49.38 percent in September, data from the Turkish Statistical Institute (TÜİK) showed on Oct. 3.

This marked the lowest annual inflation rate since July 2023.

Consumer prices advanced 2.97 percent month-on-month after rising 2.47 percent in August.

Data to be unveiled by the Turkish Statistical Institute (TÜİK) later this week is expected to show a further decline in the annual inflation rate in September.

Türkiye's annual inflation is forecast to drop to 48.1 percent in September from 51.97 percent in August, according to a state-run Anadolu Agency poll of economists.

In August 2024, Bulgaria experienced a monthly inflation rate of 0.1%, while the annual inflation compared to August 2023 stood at 2.1%, according to data from the National Statistical Institute (NSI).

In a widely expected move, Türkiye's Central Bank has left its policy rate unchanged at 50 percent for the sixth month in a row.

In a statement released after the Monetary Policy Committee meeting on Sept. 19, the bank reiterated that it remains highly attentive to inflation risks.

The European Central Bank (ECB) has cut interest rates again as inflation in the Eurozone slows and economic growth falters. However, no clear guidance was given on future actions, even though investors expect continued easing in the coming months. The deposit rate was lowered by 25 basis points to 3.5%, a move anticipated after a similar cut in June.

The European Central Bank is expected to cut interest rates again this week as inflation drifts back down towards its two-percent target, but policymakers will likely stay tight-lipped on future moves.

The ECB began raising rates sharply in mid-2022 to throttle surging consumer prices but has begun to ease the pressure as inflation rates have fallen.

In July 2024, producer prices in the EU and the euro area saw an increase of 0.8% compared to June 2024, according to preliminary data from Eurostat. This follows a 0.6% rise in both regions during June 2024. Bulgaria reported the highest growth in producer prices within the EU, with an increase of 3.6% on a monthly basis.

The recent record high in gold prices has sparked discussions among financial analysts about its implications for the economy. Analysts suggest that this trend could signal an economic slowdown, potentially leading to reduced interest rates by the end of the year.

Initial Eurostat estimates show that the Harmonized Index of Consumer Prices in Greece inched up to 3.1% in August, from 3% in July, the fifth-highest annual rate in the eurozone.

Overall, the inflation rate in the 20-member eurozone dropped to 2.2% in August, from 2.6% in July.

Inflation in Türkiye is expected to fall to around 24 percent next year, according to a report released by the International Monetary Fund (IMF) on Wednesday.

"In the medium term, a further drop in inflation would boost confidence, and growth would rise back toward potential of 3.5-4 percent," the IMF said in its 2024 Article IV Mission.