Turkey: Inflation bounces back in June
July 4, 2012
In June, consumer prices declined 0.90% over the previous month. The drop exceeded both the 0.21% fall recorded in May as well as market expectations of a 0.40% decline. Despite the monthly drop, annual inflation rose from 8.3% in May to 8.9% owing to an unfavourable base effect. The monthly price fall mainly reflected a sharp decline in prices for food and non-alcoholic beverages as well as for transportation. The core inflation index, which excludes more volatile categories such as unprocessed food and energy, added 0.41% over the previous month. Despite the rise, annual core inflation inched down from 9.3% in May to 9.2% in June. The Central Bank of Turkey (CBRT) sees inflation ending the year at 6.5% and moderating to 5.2% by the end of 2013. The official inflation target, however, remains at 5.0% for both years.