Turkey inflation accelerates to 12.15 percent in January

Turkey’ annual inflation rose to 12.15 percent in January, the Turkish Statistical Institute said. The rise exceeded most forecasts and keeps Turkey’s real policy interest rate below zero.

Consumer price inflation accelerated from 11.84 percent in December, the institute’s website said. Heavily weighted food price inflation slowed from 10.9 percent to 9 percent that month, putting it below the central bank’s year-end forecast of 11 percent. 

Alcohol and tobacco drove the annual inflation figures with price rises of more than 42 percent, though the government’s cancellation of a planned tax increase on these products kept them stable for the month.

January was the third month of rising inflation after a dramatic drop last year. Inflation had climbed to a peak above 25 percent in October 2018 after a currency crisis, but was brought below double figures last year.

The lira remained stable at around 5.98 against the dollar at 10 a.m. after the institute’s announcement on Monday.

The central bank’s next rate-setting meeting is scheduled for Feb. 19. Five rounds of rate cuts have pushed the benchmark rate below zero, with the real rate now standing at - 0.9 percent.