ANKARA: Turkey’s inflation headache showed tentative signs of abating as consumer prices fell by more than expected in August. Inflation hit 8.05 per cent in August, receding from the six-month high of 8.79 per cent hit in July and below the 8.4 per cent pace predicted by economists ahead of the release. But it remains far above the central bank’s 3-7 per cent target rate. Core inflation, which strips out volatile elements such as gold, food and tobacco, also fell back more than expected to 8.41 per cent from the 8.55 per cent forecast.
Turkish monetary policymakers cut interest rates again last month, ploughing on with an easing cycle in a bid to support growth and spending following a botched military coup in July. The central bank has also promised unlimited liquidity to commercial banks and is seeking to boost gold reserves at private lenders, in its latest policy innovation designed to ease liquidity constraints.
Inflation was pushed up by a 23 per cent rise in the cost of alcohol and tobacco said Turkstat, while the cost of healthcare rose 10.6 per cent. Of the 417 items in the inflation basket, the average price of 60 remained unchanged while 211 goods and services increased and 146 items saw prices fall, added Turkstat.
