May 16 2019

Turkish inflation expectations worsen for second month

Turkey’s inflation rate is expected to be 16.7 percent by the end of the year, according to a monthly survey by the central bank.

Expectations worsened from estimates of 16.2 percent in April and 15.6 percent in March, the central bank said on Thursday.

The Turkish government is seeking to slow inflation to a goal of 15.9 percent by December as part of a plan to ensure that the country emerges from a currency crisis and returns to growth after two quarters of economic contraction. Losses for the lira this year, which total about 13 percent, threaten those plans.

Inflation slowed to 19.5 percent in April from 19.7 percent in March.

The lira was expected to trade at 6.11 per dollar at the end of the month and 6.43 per dollar by Dec. 31. That compared with predictions of 5.79 and 6.20, respectively, in the April survey.

The currency fell 0.4 percent to 6.02 per dollar at 5:39 p.m. in Istanbul on Thursday.

Turkey’s economy will probably grow by 0.3 percent this year, the survey said. The prediction halved from April’s 0.6 percent. It had stood at 1.2 percent in March.

The survey was compiled from responses by 96 people, including 76 from the finance sector and 12 from industry. A further eight were classified by the central bank as professionals.