Turkey's Producer Price Index MoM for December 2025 Shows Moderated Inflationary Pressure at 0.75%
Table of Contents
Turkey's Producer Price Index (PPI) for December 2025 rose by 0.75% month-over-month (MoM), slightly below market expectations of 0.60% but down from November's 0.84% increase, according to the latest data released on January 5, 2026, from the Sigmanomics database. This reading signals a continued moderation in upstream inflation pressures compared to the volatile summer months, though it remains elevated relative to the 12-month average of approximately 1.85% MoM throughout 2025.
Drivers this month
- Energy prices remained a key contributor, though their month-on-month rise slowed compared to prior months.
- Intermediate goods costs showed mild increases, reflecting ongoing supply chain adjustments.
- Core manufacturing inputs stabilized, suggesting easing cost-push inflation.
Policy pulse
The 0.75% MoM increase remains above the Central Bank of the Republic of Turkey's (CBRT) inflation target corridor, maintaining pressure on monetary authorities to balance growth and inflation control. The moderation from November's 0.84% suggests some easing but not enough to signal a clear disinflation trend.
Market lens
Immediate reaction: The Turkish lira (TRY) weakened marginally against the US dollar following the release, reflecting cautious investor sentiment amid persistent inflation concerns. Short-term yields on Turkish government bonds edged higher, while equity markets showed muted responses.
The PPI reading for December 2025 at 0.75% MoM contrasts with the previous months' figures: November 2025 at 0.84%, October 2025 at 2.52%, and September 2025 at 2.48%. This downward trajectory over the last quarter highlights a gradual easing of producer-level inflationary pressures after a peak in mid-2025. However, the December figure remains significantly above the subdued readings seen in early 2025, such as March's 2.12% and April's 1.88%, indicating persistent inflationary momentum.
Monetary Policy & Financial Conditions
The CBRT has maintained a cautious stance, keeping policy rates relatively high to anchor inflation expectations. The December PPI data supports the central bank’s recent decisions to avoid premature easing. Financial conditions remain tight, with credit growth slowing and real yields on Turkish government bonds staying positive, reflecting market concerns about inflation persistence.
Fiscal Policy & Government Budget
Turkey’s fiscal policy continues to focus on supporting growth while managing inflation risks. The government’s budget deficit widened slightly in late 2025 due to increased subsidies on energy and food prices, which indirectly affect producer costs. This fiscal stance may limit the government's ability to provide further stimulus without exacerbating inflationary pressures.
What This Chart Tells Us
The downward trajectory of Turkey’s PPI over the last four months suggests a cooling of upstream inflation pressures. If sustained, this could alleviate some pass-through effects to consumer prices, supporting a gradual easing of headline inflation. However, the current level remains elevated, indicating that inflation risks persist in the near term.
Market lens
Immediate reaction: The TRY/USD exchange rate dipped 0.3% in the first hour post-release, reflecting investor caution. Two-year government bond yields rose by 10 basis points, signaling market expectations for continued monetary tightening. Breakeven inflation rates edged higher, underscoring inflation concerns despite the moderation in PPI.
Looking ahead, Turkey’s PPI trajectory will be shaped by several factors. The base case scenario (60% probability) foresees continued moderation in producer price inflation, with monthly increases stabilizing around 0.5%-0.8% as global commodity prices remain stable and supply chains normalize.
Bullish scenario (20% probability)
Stronger-than-expected disinflation occurs if energy prices decline sharply and fiscal tightening reduces demand-pull pressures. This could allow the CBRT to begin easing policy rates by mid-2026, supporting growth without reigniting inflation.
Bearish scenario (20% probability)
External shocks such as renewed geopolitical tensions or commodity price spikes push PPI higher, potentially above 1.2% MoM. This would force the CBRT to maintain or increase policy rates, risking slower growth and financial market volatility.
External Shocks & Geopolitical Risks
Turkey remains exposed to regional geopolitical risks, including tensions in neighboring areas that could disrupt trade and energy supplies. Any escalation could reverse recent inflation gains. Additionally, global inflation trends and monetary policy shifts in major economies will influence Turkey’s inflation outlook.
In summary, December 2025’s PPI MoM reading of 0.75% confirms a slowing but persistent inflationary environment in Turkey’s production sectors. The moderation from previous months is encouraging but not yet sufficient to signal a definitive easing of inflation pressures. Policymakers face a delicate balance between supporting growth and containing inflation amid external uncertainties and fiscal constraints.
Financial markets are likely to remain sensitive to inflation data and central bank signals in the near term. Investors should monitor commodity prices, geopolitical developments, and fiscal policy adjustments closely as these will be key drivers of Turkey’s inflation trajectory in 2026.
Key Markets Likely to React to Producer Price Index MoM
The Producer Price Index is a critical inflation gauge that influences currency, bond, and equity markets in Turkey. Key tradable symbols historically sensitive to Turkey’s PPI include the Turkish lira (TRYUSD), local government bonds, and select stocks in the energy and manufacturing sectors. These markets respond swiftly to inflation data as it shapes expectations for monetary policy and economic growth.
- TRYUSD – The Turkish lira’s exchange rate often reacts to inflation data, reflecting shifts in monetary policy expectations.
- EREGL.IS – A major steel producer sensitive to input cost changes driven by PPI fluctuations.
- TUPRS.IS – Turkey’s leading oil refiner, impacted by energy price-driven PPI movements.
- EURTRY – The euro-Turkish lira pair reflects broader risk sentiment and inflation outlooks.
- BTCUSD – Bitcoin often serves as an inflation hedge and risk barometer in emerging markets.
FAQ
- What does the Producer Price Index MoM indicate for Turkey?
- The PPI MoM measures monthly changes in prices received by producers. It signals inflation trends at the production level, impacting consumer prices and monetary policy.
- How does the December 2025 PPI compare to previous months?
- December’s 0.75% increase is lower than November’s 0.84% and significantly below October’s 2.52%, indicating easing inflation pressures.
- What are the main risks affecting Turkey’s inflation outlook?
- Key risks include energy price volatility, geopolitical tensions, fiscal policy shifts, and global inflation trends that could reverse recent disinflation gains.
Takeaway: Turkey’s December 2025 PPI data confirms a slowing but persistent inflation environment, underscoring the need for cautious monetary policy amid external uncertainties.
Updated 1/5/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The December 2025 PPI MoM increase of 0.75% marks a modest decline from November's 0.84%, continuing a three-month downward trend from October's 2.52%. Compared to the 12-month average of roughly 1.85%, the latest reading signals a significant moderation in producer price inflation.
Examining the trend from August through December 2025, the PPI has steadily declined from 1.73% in August to 0.75% in December, reflecting easing cost pressures in energy and intermediate goods sectors. This trend aligns with global commodity price stabilization and improved supply chain conditions.