Babacan confident on inflation

ANKARA (Reuters) – Turkish Economy Minister Ali Babacan said yesterday he believed Turkey would achieve its 2006 inflation target of 5 percent and said short-term inflation fluctuations were not a cause for concern. Babacan reiterated Ankara had reached no decision on the early repayment of International Monetary Fund (IMF) debts, saying that the standby accord with the fund would continue until May 2008 as scheduled. «Nobody should worry about possible fluctuations in inflation for a month or two… I think we will achieve the year-end 5 percent (CPI) inflation target,» he stated. Last week April inflation came in sharply higher than expected, reducing expectations of a near-term interest rate cut. The consumer price index (CPI) rose 1.34 percent month-on-month for an annual rise of 8.83 percent. The figures made economists doubt whether Turkey will reach its year-end inflation goal; the central bank has also said it may not.