Turkey's cbank revises year-end inflation forecast

By Tuba Sahin

ANKARA (AA) - The Central Bank on Tuesday revised Turkey's year-end inflation forecast to 13.4 percent from 8.4 percent.

Speaking at a news conference in the capital Ankara, bank's Governor Murat Cetinkaya said the revision was made due to a number of reasons that included increasing oil prices, a rise in import prices, food inflation and deterioration in pricing behavior.

Cetinkaya said the inflation rate is projected to gradually move towards the bank's medium-term target of 5 percent under a tight monetary policy stance and enhanced policy coordination.

The governor said the rate will fluctuate between 12.5 percent and 14.3 percent through the end of 2018.

"Indicators regarding pricing behavior suggest that there is a growing tendency to raise prices," Cetinkaya said.

The Central Bank also increased its mid-point inflation forecast for the end of 2019 to 9.3 percent from 6.5 percent in a report released last April.

"Inflation is likely to be 13.4 percent at the end of 2018, 9.3 percent at the end of 2019, 6.7 percent at the end of 2020, and settle around 5 percent in the medium term," Cetinkaya said.

The country's annual inflation increased to 15.39 percent in June, up from 12.15 percent in May, according to the latest report from Turkish Statistical Institute on July 3.

The bank also increased its oil price forecast to $73 per barrel for both 2018 and 2019 from $68 and $65, respectively, over a previous report.

Turkey is an oil importing country which benefited from lower oil prices in recent years.