Annual inflation drops in Turkey

ANKARA

Inflation in Turkey declined for the second month in July in line with expectations, according to data released by the Turkish Statistics Institute (TÜİK) on Aug. 3.

The annualized inflation rate fell to 6.81 percent in July from 7.2 percent in June, decreasing to the lowest level in the last two years, mainly due to the base effect and improvement in core inflation indicators, according to analysts. 

The Consumer Price Index saw a 0.39 percentage point decline in July from June.

In an inflation report, published on July 30 by the Central Bank, Gov. Erdem Başçı said te bank’s mid-point year-end inflation forecast now stood at 6.9 percent, up from 6.8 percent in its last report, underlining that the fluctuations in forex markets have slowed down. The bank left its 2016 mid-point forecast at 5.5 percent.

While food inflation and energy inflation have declined, helping the annual rate fall, Başçı said the drop in value of the Turkish Lira had offset these changes to some extent.

Başçı said further improvement was needed in the inflation outlook. “We forecast inflation to reach our targets in the medium term,” he added.