Turkish deputy PM says inflation main economic challenge in 2016

Turkey's main economic challenge this year will be battling inflation amid a continuing increase in the rate, according to Turkish Deputy Prime Minister Mehmet ?im?ek. 

"The general trend in the inflation rate is not at desired levels and our inflation performance is relatively poorer than our general macroeconomic performance?We need to maintain solid steps in the fight against the rising inflation rate in 2016. This target can be achieved," he said in a televised interview with NTV on Jan. 4. 

Consumer prices rose 8.81 percent year-on-year in December 2015, above estimates, data from the Turkish Statistics Institute (TÜ?K) showed on Jan. 4. On the 12-month basis, the average rate was 7.67 percent in December 2015. According to TÜ?K data, the largest increase was seen in food and non-alcoholic beverages last month with a 1.24 percent hike. The steepest drop was seen in clothing and footwear with a decrease of around 2 percent. 

"Food prices have continued to rise. Besides, the loss in the Turkish Lira's value also caused some hikes in the inflation rate both November and December 2015," Oyak Investment Chief Economist Mehmet Besimo?lu was quoted as saying by Reuters on Jan. 4. 

"The annual inflation hit even 1 percent higher than the latest estimate of the Central Bank, and this is negative in terms of credibility. Furthermore, we don't see any move on the monetary policy side. The Central Bank doesn't even limit liquidity ? By foreseeing the hikes in cigarette, alcoholic drink and electricity prices, we had already pushed up our 2016 inflation estimate from 7 to 8 percent, but there will be more as the price hikes will affect the pricing trends," he added. 

Hikes in taxes, prices

The government increased special...