Turkey to make single-digit inflation permanent with price adjustments

Turkey’s government will introduce a series of measures to ensure that consumer price inflation remains in single digits, Daily Sabah newspaper reported.

The steps will include curbing prices set by the public sector, such as setting the price of energy in lira, and expanding agricultural production, Daily Sabah, which has close ties to the government, said on Monday.

The authorities will implement “structural transformation steps that will increase competition and efficiency in goods and services markets with the co-direction of monetary and fiscal policies,” the newspaper said.

Turkey’s annual consumer price inflation sank to 9.3 percent in September from 15 percent the previous month, beating economists’ estimates. It was the lowest level in more than two years. The slowdown has occurred after a severe economic downturn sparked by a currency crisis in the summer of last year.

Publicly driven prices and wages will be adjusted according to the government’s inflation targets rather than current inflation to end "inflation inertia", or its resistance to decreasing, Daily Sabah said.

Seasonal food price changes will be limited by increasing irrigation and greenhouse farming. All vegetable and fruit trade will be recorded, intermediaries will be inspected and the infrastructure of wholesale vegetable and fruit markets will be renewed and modernized, the newspaper said.

The Turkish Grain Board and the Meat and Milk Board will act to curb volatility in food prices by taking part in the market with effective import and export practices and through buying, selling and storing transactions, Daily Sabah said.