Central Bank increases inflation forecast

ANKARA – Anadolu Agency

AA Photo

The Turkish Central Bank has raised its 2015 year-end inflation rate estimate to 6.8 percent from 5.5 percent amid renewed discussions about the nature of the recent hike in consumer prices.
 
However, the Bank still sees a fall in the rate next year. 

“The inflation rate will fluctuate between 3.7 percent and 7.3 percent through the end of 2016. The mid-point will be 5.5 percent,” said Central Bank Governor Erdem Başçı, during a speech in Istanbul to announce the Bank’s quarterly inflation report.

The weak first quarter was caused by temporary factors, including weather conditions, he said, raising hopes for faster growth in the second half of the year. 

Başçı renewed his thesis that the hike in food prices limited improved inflation in a presentation to cabinet members on April 27.

In the presentation, the Bank blamed food prices for a rise in inflation while warning that measures were needed to improve food supply, even as the agriculture minister ruled out any problems in output. 

In addition to food measures, the country should continue cautious monetary and fiscal policies, Başçı said.