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Turkish Finance Minister’s single digit inflation forecast failed: CPI forecast revised to 15.85

Turkish Treasury and Finance Minister Berat Albayrak recently forecast that the inflation rate would drop to a single digit but The Central Bank of Republic of Turkey’s (CBRT) market expectations survey in June shows that year-end consumer price index (CPI) fell to 15.85 percent from 16.68 percent of the latest survey.

The CBRT’s expectation for the USD /Turkish Lira exchange rate at the end of the year was revised from 6.431 to 6.3015, while the weekly repo rate which is also used as a policy rate, was expected to drop to 22.62 from 24 percent at the end of the next three months.

Albayrak commented during the Eid in Trabzon city on June 6 that inflation would come to a single digit after three months.

“We will probably start to see single digit inflation again in September and October,” Albayrak said.

He also claimed that ‘worst winter days’ had been left behind and the Turkish economy would for the first time enter the period of current account surplus.

CBRT announced that Turkey’s current account deficit fell to $1.3 billion in April, improving from a $5.6-billion deficit in the same month last year.

However, Turkey’s short-term external debt stock amounted to $119.4 billion as of the end of the first quarter of 2019.

Turkey Statistical Institute (TSI) consumer prices percent compared to the same month of the previous year 18.71 in May, announced that it had increased by 19.91 percent in the 12-month average.

Producer prices were 28.71 percent higher than May the previous year and 32.85 percent higher than the 12-month averages.

“A rise in general index was realized in Consumer Price Index on the previous month by 0.95%, on December of the previous year by 4.99%, on same month of the previous year by 18.71% and on the twelve months moving averages basis by 19.91% in May 2019,” according to TSI data.

Domestic Producer Price index increased by  28.71% during the same month of the previous year basis and by 32.85% in the 12 months moving averages basis in May 2019, TSI data shows.

Moody’s downgrades Turkey’s ratings to B1

“Moody’s Investors Service has today downgraded the Government of Turkey’s long-term issuer ratings to B1 from Ba3 and has maintained the negative outlook,” the US credit rating agency Moody’s announced.

“Turkey’s credit rating is incompatible with the country’s fundamental economic indicators… the move by the credit rating agency raises questions about its objectivity and neutrality,” Albayrak said in response to the agency early Saturday.

In August 2018, the agency downgraded Turkey’s rating to Ba3 from Ba2.

Turkey’s April food inflation 31.9 percent higher than EU average – OECD

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