Turkish year-end inflation may be double the official target

ANKARA (AFP) – Year-end inflation in Turkey is likely to climb to 10.5 percent, doubling the official target of 5 percent, Central Bank Governor Durmus Yilmaz said yesterday. Under the prevalent scenario drawn up according to current economic conditions, the year-end figure would be between 9.1 and 10.5 percent, Yilmaz told a news conference. «We estimate there will be an evident fall in inflation starting from the second quarter of 2007,» he said, adding that the annual rate was projected at between 3 and 6.5 percent next year. Inflation has been on the rise since April, pushed up by increasing oil prices and a depreciation of the Turkish lira. The currency, which lost about 20 percent of its value against the dollar, was hit by global capital flight from emerging markets and political tensions at home. Both the government and the Central Bank have conceded that inflation will overshoot the 5-percent target this year, while maintaining optimism that the 2007 target of 4 percent is within reach.