Turkey inflation accelerates to 14.6 percent in challenge for central bank
Turkey’s consumer price inflation rate rose
to 14.6 percent in December, exceeding economists’ estimates as it climbed for
the third-straight month.
Accelerating price increases may keep
pressure on the central bank to extend a series of interest rate hikes even
after it more than doubled borrowing costs since September.
Inflation gained from 14 percent in
November, led by an increase in the price of food, transportation and
miscellaneous goods and services, which all rose by more than 20 percent
annually, the Turkish Statistical Institute said on its website on Monday.
Clothing and footwear were the only items to register a decrease.
Annual price rises, the highest since
August 2019, were forecast at 14.2 percent, according to the median estimate in
a Reuters poll of 14 economists last week. The predictions had ranged from 13.7
percent to 15.3 percent.
Turkey’s central bank has hiked its
benchmark interest rate to 17 percent from 8.25 percent in September to rein in
inflation and to defend the lira, which sunk to successive record lows during
2020. It next meets on interest rates on Jan. 21.
Central bank governor Naci Ağbal, appointed
by President Recep Tayyip Erdoğan on Nov. 7, has vowed to keep borrowing costs
high in 2021 to slow inflation to 5 percent in the medium term.
Annual producer price inflation accelerated
to 25.2 percent last month, the highest level since May 2019, from 23.1 percent
in November. Manufacturing price increases stood at an annual 27.3 percent.
The lira traded up 0.4 percent at 7.4 per
dollar after the data was released, paring earlier gains. The currency hit a
record low of 8.58 per dollar in early November.
