World Economy

Turkey’s Annual Inflation 8%

Turkey’s Annual Inflation 8%Turkey’s Annual Inflation 8%

Inflation in Turkey rose in September to an annual rate of almost 8%, reinforcing concerns about the economic outlook.

The consumer price index rose 0.89% month-on-month to a yearly figure of 7.95%, well above the government target of 5%, Hurriyet reported.

The news puts more pressure on the central bank to raise interest rates after leaving them unchanged last month. But such a move is considered unlikely before parliamentary elections next month.

The price rises were driven by food and soft drinks, transport, miscellaneous goods and services.

Also of concern is the rise in core inflation which reflects the impact of the ailing lira, which has hit a series of record lows against the dollar.

Rising protectionism is hurting the performance of Turkish exporters, head of Turkish Exporters Assembly said on Oct. 5.

In a speech at the G-20 in Istanbul, TIM’s Mehmet Buyukeksi said, “Protectionism is increasing in every market around the world and it is affecting not only Turkish exports, but also Foreign direct investment in Turkey.” FDI has been at a high value in Turkey for some time, Buyukeksi said.

In 2007, FDI was at $17.5 billion and, even in challenging global conditions, was at $12.5 billion last year.

“Uncertain global economic conditions and exchange rate volatility have reduced FDI investment in Turkey. In particular, the devaluation of the euro against the dollar has affected total FDI value,” he said.

But certain trade agreements and actions by multinational companies have led to increased protectionism, which has had a limiting effect on investment in Turkey, he said.