Turkish inflation may slow to single digits in three months, Albayrak says

Inflation in Turkey will most probably slow to single digits, about half of current levels, by September or October, according to Turkish Treasury and Finance Minister Berat Albayrak.

The Turkish government has already slowed annual price increases from levels of between 25 percent and 30 percent to 18 percent, Albayrak said in the northeastern city of Trabzon on Thursday, local media including Sabah newspaper reported. Interest rates were also falling sharply, he said.

Turkey’s inflation rate surged to 25.2 percent in October, the highest level in a decade and a half, after a currency crisis ripped through the economy. The lira has weakened on fears that Turkey‘s credit-fueled economy was overheating and due to ongoing political tensions with the United States.

Albayrak said Turkey had been the subject of baseless economic attacks from abroad. But the government has repelled the aggresssion and as inflation and interest rates decline, Turkish companies are able to access credit markets more easily and will strengthen their investments, he said.  

The lira fell 1.4 percent to 5.85 per dollar at 11:45 a.m. local time in Istanbul on Friday, partially erasing gains made in recent days. It lost 28 percent of its value last year and has fallen about 10 percent since the start of January.

Trabzon has been a focus for Turkish politicians campaigning for a rerun of mayoral elections for Istanbul on June 23. The city is close to Rize, the hometown of President Recep Tayyip Erdoğan’s family, and many of the area’s residents migrated to Istanbul over the past few decades.