Turkish inflation falls to lowest level since August

Ankara:Turkish inflation has dropped below 20 percent for the first time since August last year, reaching 19.67 percent in February, official statistics showed Monday.

Consumer prices had been falling since a 15-year high in October, but inflation rose in January and reached an annual rate of 20.35 percent from 20.30 percent in December.

The highest monthly increase was recorded in health, at 2.48 percent, according to the Turkish statistics office (TUIK).

In January the Turkish central bank cut its 2019 inflation forecast to 14.6 percent from a previous estimate of 15.2 percent.

Food prices increased just 0.9 percent in February after surging 6.4 percent in January, the drop reflecting Ankara’s push to drive prices down.

Ahead of local elections on March 31, Turkish authorities set up their own vegetable stands, selling produce at a much cheaper rate to force markets to lower their prices.

Some of the major supermarket chains operating in Turkey, such as Migros, cut their own vegetable prices after the stalls were established last month.

Reacting to the figures, Turkish Finance Minister Berat Albayrak said on Twitter that the data “showed the effects of the measures taken. Inflation will continue to fall”.

During a rally on Saturday, Turkish President Recep Tayyip Erdogan said inflation would “fall once again to six, seven (percent)”, adding: “20-19 (percent) inflation doesn’t suit us.”

The central bank will meet on Wednesday to decide on interest rates, the last meeting before the polls. Most economists expect the bank to keep its current rate of 24 percent.

Jason Tuvey, senior emerging markets economist at UK-based Capital Economics, said in a note that Monday’s data was “unlikely to be enough to persuade” the bank to lower rates.