Turkish annual inflation falls below 20pc in Feb

6 March, 2019 12:00 AM printer

ANKARA. Annual Turkish consumer price inflation fell to 19.67 per cent in February, official data showed on Monday, dropping below 20 per cent for the first time since August as food price inflation eased following a government price-cutting campaign.

Economists said the decline was not sufficient to prompt an immediate interest rate cut by the central bank, which is expected to leave key rates unchanged at its policy-setting meeting on Wednesday, report agencies.

Inflation is a key concern for policymakers, having peaked at a 15-year high above 25 per cent in October. A near 30-percent slide in the lira against the dollar last year has fuelled the inflation and led to a sharp slowdown in economic growth.

Finance Minister Berat Albayrak hailed the February data as showing the success of state sales of cheap vegetables last month and said there will be a significant fall in inflation from this summer due to structural measures on food prices.

“Despite a negative seasonal impact, food inflation remained below expectations, showing the success of the regulated sales decision in curbing food prices,” Albayrak wrote on Twitter.

Month-on-month, consumer price inflation was 0.16 per cent in February. Economists in a Reuters poll had forecast an annual rate of 19.9 per cent, down from January’s 20.35 per cent.

“We fully believe we will end 2019 with a better performance than targeted and will reach our single-digit inflation targets sooner than expected,” Albayrak added. Under its medium-term programme, the government sees end-2019 CPI of 15.9 per cent.

The lira was 0.23 per cent weaker against the dollar at 5.3905 by 0910 GMT. It had stood at around 5.38 per cent before then data and had initially firmed slightly.

“There is no change in our expectation regarding the course of inflation and the interest rate decision,” said Is Invest economist Muammer Komurcuoglu, forecasting inflation of 19-20 per cent in the first half before falling in the third quarter.