Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Turkey Inflation Jumps to 12.6%

Turkey Inflation Jumps to 12.6%

Saturday, 4 July, 2020 - 04:45
FILE PHOTO: People wearing face masks shop at Eminonu district in Istanbul, Turkey, May 4, 2020. REUTERS/Umit Bektas
Ankara - Asharq Al-Awsat

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.

Editor Picks