12-month inflation rate forecast rises (22.12.2007)

Turkish consumer prices will probably rise 6.14 percent during the next 12 months, a Central Bank survey of economists and businessmen showed. Estimates for inflation in 12 months rose from the previous survey two weeks ago, when the average forecast was 6.09 percent, the Ankara-based bank said on its Web site yesterday. Inflation at the end of the year was forecast at 8.64 percent, little changed from 8.66 percent in the previous survey.

The inflation rate jumped to 8.4 percent in November from 7.7 percent the previous month, an increase the bank blamed on tax increases and higher grocery prices caused by drought. The Central Bank lowered its benchmark interest rate by half a point to 15.75 percent on Dec. 13, the fourth consecutive cut, and said it planned to continue a “measured lowering.” The economy will probably expand 4.7 percent this year, the survey said, down from the previous forecast of 5.1 percent. Turkey's economy grew 1.5 percent in the third quarter, its slowest pace since 2001. The inflation rate will decline to 5.24 percent in two years, compared with the previous forecast of 5.21 percent, according to the survey of about 80 businessmen and economists.