Turkish annual inflation edges off 8-year high in May

Business Monday 05/June/2017 13:46 PM
By: Times News Service
Turkish annual inflation edges off 8-year high in May

Istanbul: Turkey's annual consumer price inflation stood at 11.72 per cent in May, official data showed on Monday, edging back from the 8-year high a month earlier and slightly easing pressure on the central bank to keep monetary policy tight.
Consumer prices rose 0.45 per cent in May from the previous month, the Turkish Statistics Institute said, above the 0.35 per cent increase predicted by a Reuters poll.
"The fall in inflation last month supports our view that policymakers will end the tightening cycle at next week’s MPC meeting," Capital Economics Emerging Europe economist Liam Carson said in a note.
The Turkish central bank's monetary policy committee (MPC) holds its rates-setting meeting on June 15.
Consumer inflation was driven by a 5.97 per cent rise in clothing and footwear prices but offset by a 0.55 per cent fall in prices for food and non-alcoholic drinks and a 0.73 per cent fall in transport prices.
At the end of April, the central bank raised its inflation forecast for 2017 to 8.5 per cent from 8 per cent and said it was ready to tighten policy further if needed.
In April, annual consumer price inflation was at the highest level since October 2008.
Sharp lira declines over the last year have driven the inflation rise, but the currency has rallied since April's referendum on boosting President Tayyip Erdogan's powers.
The lira dipped below 3.5 against the dollar on Monday, its firmest since April 19.
In its first policy-setting meeting after the referendum, the central bank on April 26 lifted its late liquidity window rate by 50 basis points to 12.25 per cent in an attempt to rein in inflation.
Producer prices rose 15.26 per cent year-on-year in May, and were up 0.52 per cent month-on-month, the data showed.