Turkey’s consumer price inflation may accelerate to 17.2 percent in May, remaining close to the central bank’s benchmark interest rate of 19 percent, according to a survey of economists.
The inflation rate probably rose from 17.1 percent in April, the state-run Anadolu news agency reported citing the average estimate in a poll of 14 economists.
Inflation in Turkey is the highest in major emerging markets outside of crisis-hit Argentina, posing a problem for the authorities, who are seeking to stimulate economic growth while keeping price increases in check.
Central Bank governor Şahap Kavcıoğlu, hired in March, said last month that inflation probably peaked in April and will slow down markedly in the second half of the year, giving room for rate cuts. But higher global commodity prices and the weaker lira are throwing that prediction into doubt, according to some investors.
The Turkish Statistical Institute is due to announce May inflation data on Thursday.
The central bank is forecasting year-end consumer price inflation of 12.2 percent. That prediction is more optimistic than an average estimate of 13.8 percent in the bank’s monthly survey of finance industry professionals and business leaders. The estimate has deteriorated from 11.2 percent in January.
The central bank says it will set interest rates according to actual inflation and expectations for future price increases. Its monetary policy committee will next meet on rates on June 17.
The lira fell to a record low of 8.61 per dollar on Friday, taking losses to 16 percent since mid-March, when President Recep Tayyip Erdoğan sacked Kavcıoğlu’s more hawkish predecessor. The currency was trading up less than 0.1 percent at 8.54 per dollar on Monday morning.