Turkey Inflation December 2007

Turkish consumer prices rose 0.22 pct in December from November to reach 8.39 pct on a 12-month basis, more than double the government's inflation target, according to data released by Turkstat earlier this week. This made the second year in a row Turkey missed its year-end inflation target under an economic recovery programme backed by the International Monetary Fund (IMF).




Producer prices climbed also by 0.15 pct from November to December for a total increase of 5.94 pct in 2007, the institute said. The Central Bank has blamed higher oil prices and a long-lasting drought for the figure and warned last month planned electricity, natural gas and food prices rises would continue to pose risks to limiting inflation.



In 2006, inflation was 9.65 pct, nearly double the austerity programme's 5 pct target. Tight IMF-backed financial policies had helped the government beat inflation targets over the previous three years, bringing the rate down from 29.7 pct in 2002 to 7.7 pct in 2005. Turkey has set its year-end inflation target at 4 pct for 2008, 2009 and 2010.