Inflation Settles down, 37 Year Lows Reached
Published: Wednesday, January 04, 2006
zaman.com
The successes of 2002, 2003 and 2004 to keep inflation within target rates continued in 2005 as well. Consumer prices increased 7.72 percent remaining below eight percent, the official target of 2005.
Producer prices increased 2.66 percent last year; these figures prove Turkey's return to 1968 in consumer prices and to 1964 in producer prices.
State Minister Ali Babacan announced the lowest figures of the last 37 years were reached with 7.72 percent of yearly inflation in consumer prices. Consumer prices had become 0.53 percent at the end of 1968. Babacan stressed the success in inflation was realized despite oil prices that increased by nearly 2.5 times in three years.
Consumer prices in December increased 0.42 percent and producer prices regressed 0.04 percent.
The government economy taskforce aims at a five percent inflation this year, and four percent for 2007 and 2008.
Economists think remaining below the target for the last four years has increased the confidence of the markets and the business community. They expect the successful performance to continue in 2006 as well.
According to economists, the fall in oil and food prices affected the inflation that followed a low profile in December as well.
Finans Investment Economist Volkan Kurt expressed there is no pressure from the exchange rates and costs; and the trend of descent will continue. According to Yapi Kredi Bank senior economist Yelda Yucel, high oil prices are still a risk element, and Fortis economist Haluk Burumcekci expects no new interest discount from the Central Bank this year.
According to the Turkish Institute of Statistics data, agriculture prices increased 1.72 percent in December and the manufacturing industry prices regressed 0.58 percent.
A fall of 0.27 percent was seen in the food sector which generally was expected to be high seasonally in December, and a fall of 4.92 percent was reported in alcoholic beverages. (where the hell did they get that from ?)
The oil prices that were effective in the low inflation data last month remained below $60. Crude oil prices regressed by 4.8 percent in December.
