Zeybekçi: CBRT too quick to revise inflation target

The Central Bank of the Republic of Turkey (CBRT) was in a hurry to revise its inflation forecast, Economy Minister Nihat Zeybekçi said on Monday. In its report on April 30, the CBRT announced a revision to its year-end inflation forecast to 6.8 percent from 5.5 percent. "The Turkish economy is not in a position to require deviation from its 5.5 percent inflation target. Revising the inflation target to 6.8 percent from 5.5 percent without seeing the results in the third and fourth quarters is precipitated," Zeybekci told Anadolu Agency after a meeting in Denizli. The minister's comments came after the Turkish Consumer Price Index rose 1.63 percent from the preceding month, pushing the annual rate of inflation to 7.91 percent, according to a statement from the Turkish Statistical Institute (TÜİK) yesterday. "Hopefully, Turkey will see inflation at 5.5 percent, its current account deficit at 4 percent and its growth rate at 4 percent or slightly above 4 percent at the end of 2015. I believe this is because, currently, I can foresee the economy's evolution in the next three quarters," Zeybekci said. Inflation figures are closely watched in Turkey as CBRT officials have said they would maintain a tight monetary policy until there are clear signs of improvement in the inflation outlook. The food and nonalcoholic beverages index rose by 14.36 percent year-on-year. Food has been named as the chief driver of Turkish inflation by the CBRT. On April 29, Zeybekci said Turkey hopes to see this year's inflation below 6 percent. "If the variables remain constant, we hope to see 2015 inflation below 6 percent," Zeybekci said, adding he expected food inflation to slow this year, which might offset the negative effect of the decline of the Turkish lira against the dollar.