Turkey’s Producer Price Index YoY for January 2026: First Signs of Easing Cost Pressures
Turkey’s Producer Price Index (PPI) YoY for January 2026 registered at 27.17%, according to the latest Sigmanomics database release. This marks a slight decline from December 2025’s 27.67%, breaking a persistent upward trend since mid-2025. The figure remains elevated compared to the 12-month average of 25.13%, underscoring ongoing inflationary pressures in the Turkish economy.
Table of Contents
Big-Picture Snapshot
Turkey’s January 2026 PPI YoY print of 27.17% comes after December’s 27.67% and November’s 27.23%[1]. The last time the index was lower was in October 2025, at 26.59%. The 12-month average stands at 25.13%, with the lowest reading in the period being June 2025’s 23.13%.
Drivers this month
- Energy and intermediate goods prices stabilized, contributing to the 0.5 percentage point MoM drop.
- Export-oriented sectors saw input cost relief as global commodity prices softened.
- Domestic demand remained steady, but not enough to offset easing supply-side pressures.
Policy pulse
The Central Bank of the Republic of Turkey (CBRT) has maintained a restrictive policy stance, with the benchmark rate at 40%. January’s PPI print, while still high, offers early evidence that tight monetary conditions are filtering through to producer costs. However, the reading remains well above the CBRT’s medium-term inflation target of 5%.
Market lens
Immediate reaction: USDTRY slipped 0.1% in the first hour after the release. Turkish equities (notably BIST 100) saw muted gains, while 2-year government bond yields edged down by 7 basis points, reflecting tentative optimism that cost inflation may have peaked.
Foundational Indicators
Producer prices are a leading indicator for consumer inflation and corporate margins. January’s 27.17% YoY PPI is still more than five times the CBRT’s target, but the first MoM decline since June 2025 signals a possible inflection point. Over the past six months, PPI YoY has climbed from 23.13% (June 2025) to a peak of 27.67% (December 2025), before easing in January.
Drivers this month
- Global oil prices fell 4% in January, easing energy input costs.
- TRY stabilized against the USD, reducing imported inflation.
- Government subsidies on key agricultural inputs helped cap food processing costs.
Policy pulse
Fiscal policy remains expansionary, with public investment and social transfers supporting domestic demand. However, the government has signaled a willingness to rein in spending if inflation risks persist. The January PPI moderation may give policymakers some breathing room, but the gap to the inflation target remains wide.
Market lens
Turkish lira volatility narrowed post-release, with USDTRY trading in a tight band. Breakeven inflation rates for 2-year Turkish bonds dipped by 12 basis points, as investors priced in a lower risk of further monetary tightening.
Chart Dynamics
Drivers this month
- Energy and metals prices fell, contributing to the MoM decline.
- TRY stability reduced imported input costs.
- Export demand softened, easing supply bottlenecks.
Policy pulse
The CBRT is likely to maintain its hawkish bias until a clear, sustained downtrend in PPI emerges. The January moderation may delay further rate hikes but is unlikely to trigger easing in the near term.
Market lens
Immediate reaction: USDTRY slipped 0.1% and BIST 100 rose 0.3% in early trading. The Turkish 2-year yield fell, reflecting market optimism that cost inflation is stabilizing. However, risk appetite remains cautious given the high absolute level of PPI.
Forward Outlook
Looking ahead, the trajectory of Turkey’s PPI will hinge on global commodity prices, TRY stability, and domestic policy responses. The January moderation is encouraging, but risks remain skewed to the upside given geopolitical tensions and potential energy price shocks.
Scenario analysis
- Bullish (20%): PPI YoY falls below 25% by April 2026 as global prices ease and TRY remains stable.
- Base (60%): PPI YoY hovers between 26–28% through Q2, with gradual disinflation as policy remains tight.
- Bearish (20%): PPI YoY rebounds above 28% if energy prices spike or TRY depreciates sharply.
Policy pulse
CBRT is expected to keep rates high until a clear, sustained downtrend in both PPI and CPI is established. Fiscal consolidation may be accelerated if inflation proves sticky.
Market lens
Market pricing reflects cautious optimism, with Turkish equities and bonds responding positively to the first sign of easing cost pressures. However, external shocks or renewed TRY weakness could quickly reverse sentiment.
Closing Thoughts
Turkey’s January 2026 PPI YoY print offers the first tentative sign that cost-push inflation may be peaking. While the reading remains uncomfortably high, the moderation from December’s multi-year high is a welcome development for policymakers and markets alike. Sustained improvement will require continued policy discipline, external stability, and vigilance against renewed shocks.
Key Markets Likely to React to Producer Price Index YoY
Movements in Turkey’s Producer Price Index YoY have historically influenced Turkish equities, government bonds, the lira, and select global assets. The following tradable symbols are closely watched for their sensitivity to Turkish inflation and cost trends:
- BIST100 – Turkey’s main equity index, highly sensitive to domestic inflation and producer cost trends.
- USDTRY – The Turkish lira’s exchange rate against the US dollar, a direct barometer of inflation and policy credibility.
- EURTRY – Euro/Turkish lira, reflecting both domestic and European inflation spillovers.
- BTCUSD – Bitcoin/US dollar, often used as a hedge during periods of lira volatility.
- ISCTR – Shares of Türkiye İş Bankası, a bellwether for Turkish financial sector sentiment.
| Year | PPI YoY (%) | USDTRY (avg) |
|---|---|---|
| 2020 | 9.5 | 7.0 |
| 2021 | 23.7 | 8.9 |
| 2022 | 61.7 | 14.8 |
| 2023 | 44.2 | 21.2 |
| 2024 | 36.1 | 28.3 |
| 2025 | 25.1 | 32.7 |
Since 2020, surges in PPI YoY have closely tracked periods of sharp USDTRY depreciation, underscoring the currency’s role in transmitting producer cost shocks into the broader economy.
FAQ
Q1: What does Turkey’s January 2026 Producer Price Index YoY reading signal for inflation?
A1: The 27.17% YoY print suggests cost pressures may be peaking, but inflation risks remain elevated.
Q2: How did markets react to the latest PPI release?
A2: USDTRY and Turkish bond yields dipped modestly, reflecting cautious optimism about easing cost inflation.
Q3: What are the main risks to the inflation outlook?
A3: Upside risks include renewed TRY depreciation, energy price shocks, and persistent fiscal stimulus.
Bottom line: Turkey’s January 2026 PPI YoY offers early hope for cost relief, but vigilance is needed as inflation risks remain high.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
Updated 2/3/26
January 2026’s PPI YoY of 27.17% marks a reversal from December’s 27.67% and stands above the 12-month average of 25.13%. The chart below illustrates a persistent uptrend from June 2025 (23.13%) through December, followed by the first monthly dip in seven months.
This inflection is notable: the last three months (November: 27.23%, December: 27.67%, January: 27.17%) show a plateauing of cost pressures, in contrast to the sharp acceleration seen from August (24.19%) to October (26.59%). The YoY figure remains historically high, but the pace of increase has slowed.