Turkey expects single-digit inflation on food price steps

Turkish Treasury and Finance Minister Berat Albayrak said inflation will slow to single digits this year.

Albayrak made the comments after official data showed that inflation in Turkey slowed to 15.7 percent in June, edging below the government’s year-end goal of 15.9 percent, from 18.7 percent the previous month.

Structural measures by the government to arrest food price inflation will mean the government beats its target for 2019, Albayrak said in comments on Twitter.

Turkish inflation has slowed from a three-decade high of 25.2 percent in October after the central bank raised interest rates by 625 basis points to 24 percent to contain a currency crisis. The economy entered a recession in the second half of 2018, but then emerged with positive quarter-on-quarter growth in the first three months of this year.

Last month’s slowdown in inflation was mainly driven by base effects from a year ago, Nomura economist Inan Demir said on Wednesday. While price rises are likely to slow in the August to October period, the rate is set to pick up again from November, he said.

Some economists are now predicting that the central bank, under pressure from the government to help economic growth, will cut its benchmark interest rate at a meeting on July 25.