No threat to Turkey’s CPI target

ANKARA (Reuters) – Turkey’s central bank said yesterday it saw no threat to year-end inflation targets agreed to with the IMF, although there would be some cost pressures in the coming months. The government is targeting year-end inflation of 12 percent for both consumer and wholesale prices under its $19 billion loan deal with the International Monetary Fund. «It is predicted that annual inflation will rise in the next few months, although only slightly… but the year-end inflation target will be attained,» the bank said in its monthly inflation report. «The cost increase as the result of raw material prices and exchange rates in the last two months, and the related fuel oil price hikes are expected to show their delayed effect on inflation in June-July.» The Turkish government has won widespread praise for dragging down chronically high inflation, which was in triple digits as recently as 1995. Annual consumer price inflation fell to single figures in May for the first time in 32 years, reaching 8.88 percent.