Chronic inflation

Inflation in Turkey dropped sharply in June with decreasing food prices, the Turkish Statistical Institute (TÜ?K) stated on July 3, but analysts doubt that a further decline is in store. 

The Consumer Price Index dropped 0.51 percent in June from May, bringing the annual inflation rate to 7.20 percent in June from 8.09 percent in May.

Right before the elections, it has been observed that the deterioration in economic data is continuing. 

Export data for the month of May, which was released at the beginning of the week, has created total disappointment. Exports in May fell 19 percent to $10.8 billion compared to the same month last year. The decline in exports was 8.3 percent in the first five months. 

Turkey should continue cautious monetary and fiscal policies and take steps on food supplies to keep inflation falling, the central bank governor told the country's cabinet on April 27.

"Inflation in Turkey is on a falling trend," Erdem Ba?ç? told ministers, according to the Central Bank's website.

Turkey should continue cautious monetary and fiscal policies and take steps on food supplies to keep inflation falling, the central bank governor told the country's cabinet on April 27.

"Inflation in Turkey is on a falling trend," Erdem Ba?ç? told ministers, according to the Central Bank's website.

The decline in inflation will become more pronounced during the second half of the year after a partial correction in food prices, Turkish Central Bank Governor Erdem Ba?ç? said on April 18, according to the Bank's website.

The improvement in Turkey's core inflation continued in February, with the slight rise largely due to food prices, the Central Bank announced on March 4.

In a statement after data on March 3 showed consumer prices in February rose by 0.71 percent, slightly lower than expected, the Bank stated that non-food annual inflation continued to fall.

As I noted in my last column, almost all Turkey economists were expecting the Central Bank to cut its policy and borrowing rates at the Monetary Policy Committee rate-setting meeting on Feb. 24.

Turkey's lira recovered from a record low today as investors weighed up the prospect of a rate cut after the Central Bank governor said a decision on whether to hold an early policy meeting would be made following tomorrow's inflation data.

Inflation rates made a surprise in December and were below the annual inflation expectations. The market expectation was for a slight price increase, but the figures announced the other day showed that consumer prices had dropped 0.44 percent in December.

A friend told me on Friday that most of the 2015 Turkish economy predictions he had seen on TV were rosy, prompting me to go through all the analyst reports I could get my hands on over the weekend. Here is the story they all seem to be telling: