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Nov 28 2018

Turkish inflation may slow beyond all expectations – columnist

Turkey’s inflation may slow faster than both the government and the central bank expect, said economics professor Kerem Alkin in a column for Sabah newspaper.

The consumer price inflation rate, which stood at a 15-year high of 25.2 percent in October, may decline to below the government’s estimate of 20.8 percent by the end of the year, Alkin said. The central bank predicts a rate of 23.5 percent.

Alkin, a former board member of Turkey’s sovereign wealth fund, referred to a survey by labour union Turk-Is for the month of November, which showed a pull-back in agricultural and food price inflation.

Turkey’s government has pledged to reduce inflation towards a central bank goal of 5 percent by curbing budget expenditure. It has also sought to slow the rate by calling on businesses to cut prices and cracking down on alleged hoarding and price manipulation.

Alkin said current account data may also shock economists. The balance of flows in goods, services, and capital is expected to post a healthy surplus for October, he said.

Investors, who had sold Turkish assets due to a pessimistic outlook about the economy are now regretting their decision and buying again, Alkin said.