Turkey's inflation rises to 9.32% in July
Business |
Turkey's monthly inflation rate increase was fuelled by price rises for alcohol, tobacco and communication services, as well as the rising cost of eating out.
Inflation in Turkey rose slightly last month, from 9.16 percent in June to 9.32 percent, mainly because of a rise in alcohol, tobacco, communications and restaurant prices, the country's statistical authority said.
The Turkish Statistical Institute, known as TURKSTAT, reported the Consumer Price Index rise on Monday, putting annual inflation well above the Central Banks year-end forecast of 7.6 percent and even further beyond the five percent medium-term target.
TURKSTAT said the Producer Price Index was 0.73 percent, a 9.46 percent rise on July last year.
Alcoholic beverages and tobacco rose by 1.99 percent while communications services jumped 1.9 percent and prices in hotels, cafes and restaurants rose 1.05 percent between June and July.
There was a 3.28 percent monthly fall in the price of clothing and footwear.
Compared to the same month last year, there was a 13.74 percent increase in hotel, cafe and restaurant prices and food and non-alcoholic beverages rose by 12.56 percent, according to TURKSTAT.
The bank anticipates that inflation will slow as demand for exports rises, leading to a significant improvement in Turkeys current account deficit for 2014.
In January, the bank introduced drastic interest rate hikes in response to the rise of the U.S. dollar against the Turkish lira.
Bank Governor Erdem Basci has insisted the bank would only reduce interest rates when it is convinced the outlook for inflation is improving.
However, despite annual inflation hovering at almost double its medium-term target, the bank cut the benchmark interest rate for three consecutive months to 8.25 percent on July 17, in an attempt to boost economic growth.
By comparison, inflation in the Eurozone fell from 0.7 percent in April to 0.5 percent in May, well below the European Central Bank's overall target of two percent.
The Turkish Statistical Institute, known as TURKSTAT, reported the Consumer Price Index rise on Monday, putting annual inflation well above the Central Banks year-end forecast of 7.6 percent and even further beyond the five percent medium-term target.
TURKSTAT said the Producer Price Index was 0.73 percent, a 9.46 percent rise on July last year.
Alcoholic beverages and tobacco rose by 1.99 percent while communications services jumped 1.9 percent and prices in hotels, cafes and restaurants rose 1.05 percent between June and July.
There was a 3.28 percent monthly fall in the price of clothing and footwear.
Compared to the same month last year, there was a 13.74 percent increase in hotel, cafe and restaurant prices and food and non-alcoholic beverages rose by 12.56 percent, according to TURKSTAT.
The bank anticipates that inflation will slow as demand for exports rises, leading to a significant improvement in Turkeys current account deficit for 2014.
In January, the bank introduced drastic interest rate hikes in response to the rise of the U.S. dollar against the Turkish lira.
Bank Governor Erdem Basci has insisted the bank would only reduce interest rates when it is convinced the outlook for inflation is improving.
However, despite annual inflation hovering at almost double its medium-term target, the bank cut the benchmark interest rate for three consecutive months to 8.25 percent on July 17, in an attempt to boost economic growth.
By comparison, inflation in the Eurozone fell from 0.7 percent in April to 0.5 percent in May, well below the European Central Bank's overall target of two percent.
