Hope that Turkey’s fight against inflation is being won after February rate slows to 1.8 pct
ANKARA (Reuters) – Turkish inflation slowed in February in a sign that Turkey may be turning the corner in its fight against inflation, which has soared since the financial crisis that struck the economy a year ago. Both monthly and yearly figures were lower than in January, according to official figures published on Sunday. Consumer price inflation (CPI) rose a monthly 1.8 percent in February, well below expectations, to give an annual CPI rate of 73.1 percent, marginally lower than the 73.2 percent in January. Wholesale price inflation (WPI) showed a monthly rise of 2.6 percent in February, taking the annual rate to 91.8 percent. That compared to 92 percent in January. A Reuters poll of 20 banks and brokerages had forecast monthly rises of 3.42 percent for CPI and 3.31 percent for WPI, after 5.3 percent for CPI and 4.2 percent for WPI in January. CPI rose 1.8 percent and WPI 2.6 percent in February 2001. Core inflation, defined as private sector manufacturing sector prices, also beat the poll forecast of 2.01 percent, coming in at just 0.7 percent after 2.1 percent in January. Inflation in the agricultural sector, however, remained stubbornly high at 8.9 percent month-on-month after 10.8 percent in January. Turkey is currently implementing an IMF-backed economic program aimed at overcoming a devastating financial crisis that forced it to float the lira last February, unleashing a sharp depreciation that in turn fueled inflation. The government now aims to reduce consumer price inflation to 35 percent by the end of this year. The government’s efforts to cut inflation have been helped since late last year by a reversal in the lira’s fortunes. It has recovered some ground since hitting a low of around 1.65 million to the dollar in October and is currently trading at around 1.4 million to the dollar. Turkey signed a new $16 billion loan deal with the International Monetary Fund at the start of February, which it hopes will return the economy to growth this year.
