Inflation is expected to increase until June, partly reflecting base effects, the Central Bank of Turkey said in a presentation to economists on Wednesday.
Both nominal and real exchange rates depreciated significantly since May 2013, exchange rate pass-through remains to be the main driver of inflation as evidenced in the sharp increase in core inflation, the Bank underlined, adding that commodity prices are somewhat stable, partly limiting the cost-push pressures. The Bank, however, says that high volatility in unprocessed food prices continue to pose risks on inflation outlook. Against this backdrop, the tight monetary policy stance will be maintained until there is a significant improvement in the inflation outlook, the Bank reiterated.
As for economic activity, the Bank says industrial production remains robust as of January, yet leading indicators point to some deceleration. Resilience of production can be largely attributed to recent export growth driven by stronger external demand, especially EU demand, according to the bank. Adverse base effects due to gold trade will reverse in the forthcoming months, the Bank said. As a result of these factors, the Bank expects a significant improvement in the current account deficit for 2014.
Related Articles
Argent LNG granted export authorisation for Louisiana project
The US Department of Energy (DoE) has granted an export permit to free-trade countries to Argent LNG for its proposed Louisiana project, Reuters reported on July 27. The proposed LNG export ... more
Turkey’s BOTAS increases LNG storage capacity at Marmaraereglisi Terminal
Turkey’s state-run energy firm BOTAS has begun construction of a fourth storage tank at the company’s Marmaraereglisi Terminal in the country’s northwest, Turkish local media Daily Sabah ... more
S&P upgrades ratings of Freedom subsidiaries to ‘BB-’
S&P Global Ratings has upgraded the credit ratings of several subsidiaries of Nasdaq-listed Freedom Holding, raising ratings on Freedom Finance, Freedom Finance Europe, Freedom Finance Global and ... more