Turkey central bank cuts 2019 inflation forecast

ANKARA (AFP) – The Turkish central bank yesterday cut its 2019 inflation forecast to over 14 per cent while vowing to keep a tight monetary stance until current fast rising prices fall back.

Consumer price inflation spiked to a 15-year high in October 2018 of over 25 per cent before falling to 20.3 per cent in December, hitting consumers hard as the Turkish lira also weakened.

The central bank said in its latest report that inflation was “likely to be 14.6 per cent” at the end of 2019, down from the 15.2 per cent estimate given in October last year. After the announcement in Ankara during a presentation by Governor Murat Cetinkaya, the lira hit 5.28 against the United States (US) dollar after 0830GMT, a gain of 0.5 per cent on the day.

The lira lost 28 per cent of its value against the dollar in 2018.

The inflation forecast for 2020 also was cut to 8.2 per cent from 9.3 per cent and the central bank said it hopes price rises will stabilise at “around five per cent the medium term”. The bank, which has a nominal inflation target of five per cent, kept the food inflation estimate for 2019 at 13 per cent.