Minister Albayrak upbeat on inflation outlook
Structural measures by the government will help to maintain improvements made on the food inflation front, the minister said.
The latest data from the Turkish Statistics Institute (TÜİK) showed on July 3 that the country’s annual inflation rate sharply dropped to 15.72 percent in June from 18.71 percent in the previous month.
June’s inflation was the lowest seen in Turkey since June of last year, when it stood at 15.39 percent.
Over the last decade, annual inflation saw its lowest level at 3.99 percent in March 2011, while it peaked at 25.24 percent in October 2018.
In the month, consumer prices rose only 0.03 percent from May which was less than the market consensus forecast for a 0.08 percent increase.
Food prices declined as much as 1.65 percent on a monthly basis while clothing prices fell 1.57 percent.
Unprocessed food prices were down 5.61 percent while fresh fruit and vegetable costs declined by 11.26 percent in June from May.
Hotel and restaurant prices increased 2.65 percent month-on-month, reflecting the strong demand for those services due to the nine-day-long Eid al-Fitr holiday.
According to some economists, the bank may slash the policy rate by 100 basis points at the next monetary policy committee (MPC) meeting scheduled for July 25.
After this month’s MPC gathering, the bank will hold three more rate-setting meetings until the end of the year in September, October and December.
At its June 12 MPC meeting, the Central Bank decided to keep the one-week repo rate unchanged at 24 percent.
Developments in domestic demand conditions and the tight monetary policy support disinflation, the bank said in a statement following the June meeting.