Turkey: Inflation drops to record low in February
March 3, 2011
In February, consumer prices rose 0.7% over the previous month, which was in line with market expectations. The increase followed on a 0.4% rise in January and was halved the 1.5% increase tallied in February 2010. As a result, annual inflation fell from 4.9% in January to 4.2% in February, which is the lowest inflation rate on record. The monthly result reflected higher prices for food and non-alcoholic beverages (+2.5% month-on-month) as well as higher transportation costs (+1.8% mom). Meanwhile, the core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose a more subdued 0.3% over the previous month, driving annual core inflation up a notch to 4.0%. The Central Bank has a year-end inflation target of 5.5% for 2011 and of 5.0% for 2012 but forecasts inflation to end 2011 at 5.9%, before declining to 5.1% in 2012.