ANKARA, March 3 (Xinhua) -- Türkiye's annual inflation accelerated in February, complicating prospects for further interest rate cuts, as rising energy prices linked to the ongoing crisis surrounding Iran add fresh pressure to the economy, experts said.
Official data released on Tuesday showed that annual inflation rose to 31.53 percent in February, up from 30.65 percent the previous month. This marks the first uptick in annual inflation after several months of consecutive decline.
Consumer prices rose nearly 3 percent month-on-month in February, driven by food and energy prices, a level economists say remains elevated and inconsistent with a rapid pace of interest rate cuts.
The February reading followed a stronger-than-expected 4.84 percent monthly increase in January, which had already exceeded market consensus and challenges the official year-end inflation target range of 15-21 percent.
The latest figures come as the central bank prepares for its next rate-setting meeting on March 12. While the bank had previously begun a cautious easing cycle after an extended period of tight policy, the recent inflation trend has led analysts to reassess expectations for further cuts in the near term.
Economists point to rising energy prices as a key driver behind the renewed pressure. Escalating tensions involving Iran have pushed global oil prices higher, increasing costs for fuel, transportation and production in Türkiye, which relies heavily on imported energy.
"February's nearly 3 percent monthly inflation shows that price pressures remain persistent," Istanbul-based economist Mustafa Sonmez told Xinhua.
"When you combine this with January's rise, it is clear that the disinflation process is proving uneven," he pointed out.
Sonmez noted that higher energy prices are quickly transmitted throughout the economy.
"The Iran crisis has lifted oil prices, and Türkiye feels that impact nearly immediately. Fuel costs affect logistics, food prices and industrial production. This creates second-round effects that will make inflation harder to contain," he added.
Atilla Yesilada, another Istanbul-based economist and market analyst, said the February data has reduced the likelihood of an immediate rate cut.
"A monthly increase close to 3 percent is high, especially after January's strong figure," Yesilada said.
"Under these circumstances, the central bank may prefer to pause in March and evaluate whether the recent uptick is temporary or more persistent," he stressed.
Yesilada also noted that energy-driven inflation poses a particular challenge. "Energy prices are rising again because of the Iran-related tensions. For an economy with a sizable energy import bill, this not only affects inflation but also the current account and the exchange rate," he said.
Despite the recent acceleration, Türkiye has made significant progress in bringing down inflation from extremely high levels.
Two years ago, annual inflation had surged above 75 percent amid currency volatility and strong domestic demand. Through aggressive monetary tightening and a broader policy shift, authorities have since managed to reduce annual inflation to around 30 percent.
According to Yesilada, the final stage of disinflation is often the most difficult, particularly when external shocks emerge.
"Policymakers are walking a tightrope. They want to sustain growth and ease financial conditions, but they cannot risk undermining credibility after the hard-won gains of the past two years," he said.
