In Brief

Turk September consumer prices exceed forecasts ANKARA (Reuters) – Turkey’s consumer prices rose a more-than-expected 1.23 percent on the month in September, driven up by a spike in food prices, although the central bank has said it sees a downward trend resuming in October. Prices rose 9.24 percent on an annual basis, accelerating from annual inflation of 8.33 percent in August. The central bank has repeatedly said that core inflation indicators remained in line with medium-term targets. In July, the bank lowered its end-2010 inflation forecast to 7.5 percent from a previous 8.4 percent. Last week, it warned that extreme volatility in food prices might affect inflation in the short term but reiterated that it expected annual inflation to return to a downtrend by October and has pledged to keep its policy rate on hold until 2011. IMF sees Bulgaria’s economy improving SOFIA (Reuters) – The International Monetary Fund expects the Bulgarian economy to grow this year and next but urged the government to keep spending under control to meet its fiscal deficit targets, it said yesterday. The IMF said strong exports will put the EU country’s growth rate in the range of zero to 0.4 percent this year and allow for an expansion of up to 2.5 percent in 2011, when domestic demand will also start recovering. The emerging economy contracted by 5 percent in 2009. «Bulgaria is benefiting from stronger exports and the economy is poised to stage a gradual recovery,» the IMF said in a statement after concluding a review of the country’s public finances for this year and next. The IMF has welcomed the government’s fiscal policy up to now but urged it to maintain strict control over spending to meet its deficit target of 4.6 percent of gross domestic product in 2010, as tax revenues may be weaker than planned. Croatia growth Croatia cannot improve its budget revenues without a new growth model based on private investments, Finance Minister Ivan Suker said yesterday. In the past decade, the EU candidate’s economy largely relied on state investments, consumer spending and tourism receipts. Before the global crisis, the economy grew at an average annual rate of some 4 percent. Last year it declined 5.8 percent and a 1.5 contraction is seen this year. «We must pave the way for more private investments as we cannot boost budgetary revenues without that. The earlier model is worn out,» Suker told an economic conference. Faced with a prolonged recession and underperforming revenues, the government in August widened its expected 2010 budget deficit to 4.2 percent of gross domestic product from the originally planned 2.5 percent. (Reuters) Romanian T-bills Romania sold 910 million lei ($291 million) in six-month treasury bills yesterday at its self-imposed 7 percent yield, but analysts said its large funding needs may yet force a change of tactics. Bucharest had planned to sell 1 billion lei. Despite rising pressure on yields, Bucharest has refused almost all bids above 7 percent since May, which has led to smaller issuance and even failed tenders. The Finance Ministry plans to issue 4.6 billion lei in currency bills and bonds in October. It had planned to sell the same amount in September, but ended up selling less than half that. Analysts expect it to miss its target again this month if it sticks to its yield-cap strategy, as investors are pushing for a higher return on their investment due to uncertainty over the government’s fiscal-tightening measures. (Reuters) Turkish reserve Turkey’s central bank said yesterday it may raise its lira reserve requirement rate for banks to 6 percent by the end of this year as part of its exit strategy from crisis-induced monetary policy. The bank also said in a statement on its website it would announce its reserve requirement policy for 2011 in its basic monetary policy and exchange rate policy framework. (Reuters)

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