Turkey’s annual inflation drops to 10.4 pct in January, down from 11.9 pct in December

ANKARA

Turkey’s annual inflation was 10.4 percent in January, easing from December’s 11.9 percent, data from the Turkish Statistics Institute (TÜİK) showed on Feb. 5.

Consumer prices rose by 1 percent on a monthly basis in January after rising 0.7 percent the previous month. This rise was below forecasts.

The highest annual increase was in transportation costs at 16 percent. This group was followed by furnishing and household equipment with 13.5 percent and clothing and footwear with 12.6 percent.

The highest monthly increase was 3 percent in miscellaneous goods and services, according to TÜİK data. In January, the indices rose for furnishing and household equipment by 2.44 percent and for health by 2.42 percent.

The highest monthly decrease was 6 percent in clothing and footwear. In January, the other group that showed a decline was communications, with a 1 percent drop among the main groups.

Food prices increased by 1.67 percent, bringing annual food inflation to 8.76 percent.

High inflation has been the biggest concern for the Turkish economy in the recent months. Economic growth has seen a significant boost thanks to a series of incentives after a failed coup attempt in 2016.

The Turkish Central Bank last month lifted its year-end inflation forecast for 2018 from 7 percent to 7.9 percent.

The rise in the forecast is the result of an upward revision in the output gap along lira-denominated import price projections, the Central Bank said in its inflation report, released on Jan. 30.

“Given a tight policy stance that focuses on bringing inflation down, inflation is expected to converge gradually to the 5-percent target, reach 7.9 percent at the end of 2018 and stabilize at around 5 percent over the medium term after falling to 6.5 percent by the end of 2019,” it added.