Consumer inflation rose by 1.53% m/m, lower than both our expectation (1.8%) and the market consensus (2.0%), driving annual inflation down to 35.4%. We evaluate that the balance of risks on our 31% year-end inflation forecast become slightly tilted to the downside, depending on the overall stance of the policy mix.

The Turkish economy grew by 1.0% q/q in 1Q25, leading to an annual growth rate of 2.0%. Our monthly GDP indicator nowcasts a deceleration to a quarterly growth nearing 0% in 2Q25, which would start improving in 3Q25 with more supportive conditions.