Turkey’s Central Bank on Wednesday sharply raised its inflation forecasts for this year and next.
The bank, which previously expected 2018 inflation of 13.4 percent, also raised the forecast for the end of 2019 to 15.2 percent from 9.3 percent, Governor Murat Cetinkaya said on Wednesday.
According to the latest figures published in Turkey, the inflation rate was 24.52 percent in September.
Cetinkaya said the inflation rate is expected to stabilize at the bank's medium-term target of five percent in the medium term after it drops to 9.3 percent by the end of 2020.
"We projected the inflation rate to converge gradually to the target under the assumption of a tight monetary policy stance and enhanced policy coordination focused on bringing inflation down," he commented in a news conference in Istanbul ahead of the release of the bank's quarterly inflation report.
Growth of the world economy, fiscal policies in developed countries and oil and food prices play an important role in determining inflation rates, he stressed, adding that the central bank will take all the measures possible to maintain the stability of prices and inflation rates.
The sharp rise in the exchange rate of the dollar against the Turkish lira, which has lost more than 40 percent of its value this year, and high food prices have kept the inflation rate rising despite the government’s attempts to try to control it.
On the other hand, Turkey’s exports went up 22.4 percent year-on-year to $14.45 billion while imports decreased by 18.3 percent to $16.3 billion.
Turkey’s foreign trade deficit saw an annual fall of 77.1 percent in September, the Turkish Statistics Institute announced on Wednesday.
In the nine-month period, exports totaled $123.04 billion with an annual hike of seven percent and imports were $174.16 billion, up 3.1 percent over the same period.
Meanwhile, Iranian Foreign Minister Mohammad Javad Zarif said Wednesday that his country, as well as Turkey and Azerbaijan, have agreed to use local currencies in commercial transactions.
“Cooperation between Turkey, Azerbaijan and Iran is important for the region, and we agreed to trade in our domestic currencies,” Zarif said during the sixth trilateral meeting of Iran, Turkey and Azerbaijan foreign ministers in Istanbul.
According to the minister, the decision would protect the economic relations of the three countries against external interventions, adding that the three countries share history, culture and religion.
A technical body was established and will meet to develop a plan for the next three years, with the next meeting being held in Iran, Zarif noted.