Turkish inflation drops to 3 year low

Supported by the sharp drop in food inflation in April, Turkey’s consumer price index rises 6.57 percent from last year, providing more space for Turkey’s Central Bank to cut interest rates further.

Photo by: AA
Photo by: AA

Updated May 27, 2016

Consumer prices in Turkey in April rose 0.78 percent from the previous month, significantly below forecasts, official data revealed on Tuesday.

A report from the Turkish Statistical Authority showed that prices increased 6.57 percent year-on-year, also considerably lower than estimates.

Monthly inflation was forecasted to reach 1 percent while annual inflation was to come around 8.05 percent.

New data pointed out that annual inflation declined for four months in a row, suggesting there may be a green light for the Turkish Central Bank to continue rate cuts.

Annual inflation also declined to a level not seen since May 2013, when violent anti-government protests shook the country.

The Central Bank of Turkey has repeatedly linked further interest rate cuts to improvements in inflation outlook although recently it introduced a few measured rate cuts to its key policy rates.

Previously the Bank was under pressure from government officials who have called for lower interest rates to boost economic growth.

TRTWorld, AA