Turkey Inflation Jumps to 12.6%

FILE PHOTO: People wearing face masks shop at Eminonu district in Istanbul, Turkey, May 4, 2020. REUTERS/Umit Bektas
FILE PHOTO: People wearing face masks shop at Eminonu district in Istanbul, Turkey, May 4, 2020. REUTERS/Umit Bektas
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Turkey Inflation Jumps to 12.6%

FILE PHOTO: People wearing face masks shop at Eminonu district in Istanbul, Turkey, May 4, 2020. REUTERS/Umit Bektas
FILE PHOTO: People wearing face masks shop at Eminonu district in Istanbul, Turkey, May 4, 2020. REUTERS/Umit Bektas

Inflation in Turkey jumped more than expected to 12.6% year-over-year in June, drifting further from a central bank target, data showed.

June's annual inflation rate was at 12.62 percent from 11.39 percent in May, Turkish Statistical Institute (TurkStat) data showed.

By sector, June’s lowest annual increase in inflation was 4.84 percent in communications, while the highest rise was in beverages and tobacco with 22.41 percent.

Last week the bank unexpectedly halted a nearly year-long easing cycle in the face of a 13% drop this year in the lira, depleted FX reserves and the country’s relatively high external obligations.

Fitch, the ratings agency, said there are “sizeable downside risks” to its expectation that Turkey’s balance of payments will stabilize in the second half of the year. “External pressures remain Turkey’s main credit weakness,” it said.
Turkey’s lira slipped to its weakest since mid-May late on Friday.

The currency, which hit a record low on May 7, was worth 6.865 versus the dollar to close the week, after sliding to as far as 6.88 in late-day trading.



European Shares Sink as Trump's Aggressive Tariffs Escalate Trade War

Representation photo: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, February 15, 2018. REUTERS/Staff/Remote
Representation photo: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, February 15, 2018. REUTERS/Staff/Remote
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European Shares Sink as Trump's Aggressive Tariffs Escalate Trade War

Representation photo: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, February 15, 2018. REUTERS/Staff/Remote
Representation photo: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, February 15, 2018. REUTERS/Staff/Remote

European shares slumped to a two-month low on Thursday, with trade-sensitive Germany hit the hardest, as a fresh round of aggressive US tariffs escalated a global trade war and stoked fears of an economic slowdown.

The pan-European STOXX 600 dropped 1.7% at 0712 GMT with German equities shedding 2.4%, the most among regional markets. Wall Street futures sank 3.1% as investors shed riskier assets in favor of safe-haven bonds and gold, reported Reuters.

US President Donald Trump's move to slap a 10% tariff on most goods imported to the United States effectively raised the rate of levies on the European Union to 20% and China to 54%, with both trading partners vowing countermeasures.

Euro zone banks, sensitive to the economic outlook, dropped 3.1% as traders ramped up bets of interest rate cuts from the European Central Bank, even as the trade war threatened to stoke inflation.

The bank-heavy indexes in Italy and Spain fell 1.7% and 1.4%, respectively.

Defensive sectors such as utilities, food and beverages sector, real estate and healthcare eked out gains.