New indicators predict further collapse in the Turkish economy
(Reuters) - Inflation in Turkey is changing its rate at the wrong time, when the central bank is expected to retreat from its monetary policy to face the country's financial crisis.
According to a Bloomberg survey, economists forecast that consumer prices in Turkey will rise faster for the second straight month, while data released this week are expected to show an annual inflation rate of 20.4 percent in April.
In view of these expectations, the issue of cuts in interest rates in the country is inevitable despite the warning of the Central Bank Governor Murad Sittinkaya, the possibility of applying more monetary emphasis, where he said last Tuesday in Istanbul: "The rise of inflation may be applied additional tightening On interest rates to improve the economic landscape.
"There is a chance for a sudden rise in inflation in April driven by rising food prices, which could delay the issue of interest rate cuts," Bloomberg quoted Deutsche Bank economist Kublai Oztürk as saying. "Rapid inflation can negatively affect pricing behavior and shape consumer expectations."
The Turkish lira last month recorded the worst performance in the world's currencies, losing more than 6.6 percent of its value against the US dollar.
Despite this negative performance, the central bank kept its inflation forecast unchanged for this year and next year, at 14.6 and 8.2 percent, respectively.
One of the obstacles to the decline in inflation in Turkey, according to economists, the government failed to control food prices and control despite the many threats and fines applied to violators, as the prices of these materials in the first quarter of this year to about 30 percent, Almost double the estimates of the central bank.
A report published by the Turkish newspaper Zaman on Thursday revealed the decline in Turkish asset markets last year to a low level, making Turkey the second-largest in the world after Venezuela in the world's most populous country.
According to a study by the International Center for International Wealth Migration, Turkish asset markets fell last year to record levels of 23 percent.
Of the 90 countries, Turkey ranked second in the world's richest countries after Venezuela, which recorded an annual decline of 25 percent, with Caracas, which pushed 2.5 million of its citizens to leave, the list of the world's worst economies with inflation rates of about one million percent.