Turkish inflation slows to six-month low

Turkey’s inflation rate dropped to 10.4 percent in January, the lowest since July, as a decline in the dollar against major emerging market currencies helped pare price increases.

Inflation slowed from 11.9 percent the previous month, dropping by more than analysts’ estimates of 10.6 percent. Month-on-month inflation in clothing and footwear was a negative 6 percent, helping to pull down the headline figure. Transportation costs surged 16 percent on an annual basis.

Turkey is seeking to control inflation through means such as encouraging competition in the food industry, while providing incentives to boost economic growth. Last week, the central bank increased its forecast for inflation for the end of 2018 by almost a full percentage point to 7.9 percent, saying it expects to keep monetary policy “tight” unless there is significant improvement in the outlook for prices.

Economists have called on the central bank to do more to combat inflation, saying its 5 percent target is looking unrealistic.

Producer-price inflation slowed to 12.1 percent from 15.5 percent in December. Core inflation remained over 12 percent.

Turkish January inflation rate
Turkish inflation over past 12 months

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