Turkish inflation falls below 7 percent

Decline in food and energy inflation helps Turkey’s annual inflation rate to fall lower for second consecutive month in July

Photo by: AA
Photo by: AA

Turkey’s consumer price index (CPI) fell 0.39 percent in July, taking the country’s annual inflation rate to 6.81 percent from 7.2 percent in June according to a monthly report published by the Turkish Statistical Institute on Monday.

While a fall in food and energy prices continues to have a downward impact on inflation, clothing and footwear recorded the largest monthly fall of 4.97 percent.

On a monthly basis the cost of recreation and culture saw the highest price increases, with hotels, cafes and restaurants up 13.8 percent. 

The highest monthly increase came from furnishings and household equipment, which rose 1.60 percent. 

At the end of April, Turkey’s Central Bank Governor Erdem Basci raised his year-end inflation forecast to 6.8 percent from 5.5 percent. However, in the recent inflation report published on Thursday, Basci noted that bank's mid-point year-end inflation is now anticipated to be 6.9 percent.

Basci cited a weak lira, rising food prices and higher than expected oil prices as main causes of his forecast update. He added “cautious monetary policies” will remain until desired levels of inflation are reached. 

"We forecast inflation to reach our targets in the medium term,” added Basci, saying there is for room for improvement in the inflation outlook. 

TRTWorld and agencies