December inflation eases to 10.1 pct

Bloomberg

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Annual inflation slowed to 10.1 percent from 10.8 percent the month before, the statistics office in Ankara said on its Web site Friday. Prices were expected to rise 10.5 percent, according to the median estimate of 14 economists surveyed by Bloomberg. In the month, prices fell 0.4 percent. Slumping demand at home and abroad is helping reduce the inflation rate. The Central Bank lowered its benchmark rate by 1.25 percentage points to 15 percent in November and said on Dec. 30 that the global credit crisis was depressing demand globally, giving it room for further reductions.

"The Central Bank will probably respond with another rate cut at the January meeting," said İnan Demir, economist for Finansbank in Istanbul, speaking before the figures were announced. "I’m forecasting a 50 basis-point reduction."

The CNBC-E channel’s index of consumer confidence dropped in November to its lowest level the measure was launched in 2002, the channel said on Dec. 1. Exports dropped 25 percent in December from the same month last year, the Turkish Exporters’ Assembly said Friday. Exports of automobiles and auto parts slumped 47 percent to $1.1 billion, it said. The decline in demand and tight global credit conditions give the Bank "more room" to maneuver in monetary policy, the Bank said on Dec. 30.Governor Durmuş Yılmaz is aiming to slow inflation to 7.5 percent this year.