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Inflation Report - May 2025

ekonomi.isbank Macro Notes Inflation Report Inflation Report - May 2025

CPI inflation declined sharply in May.

In May, the monthly increase in the Consumer Price Index (CPI) was 1.53%, below market expectations (2.0%) and marked the lowest level of the calendar year. As a result, annual CPI inflation cooled to 35.41%, its lowest level since November 2021. Additionally, year-to-date CPI inflation for the first five months of 2025 stood at 15.09%, the lowest level of the past four years.

Although domestic producer price index (PPI) inflation lost some momentum compared to the previous month, it still was relatively high with 2.48% on a monthly basis. Thus, for the first time since April 2024, producer inflation exceeded consumer inflation. As of May, year-on-year PPI inflation stood at 23.13%.

Expectations

The main factor suppressing inflation in May was the sharp decline in food and non-alcoholic beverage prices -except fresh fruits. Thus, core indicators pointed to higher inflation. Although this development suggests that the underlying trend of inflation remains high, the slowdown in sticky services inflation and the concentration of sharp price increases only in the clothing group offer a relatively optimistic outlook for the continuation of disinflation.

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