Turkey’s yearly rate of inflation arose to a lesser degree anticipated in June, indicating that the central bank might fulfill its year-end inflation estimate and shift to a looser monetary policy to encourage development. The 8.86% growth in consumer prices last month hit the 9.1% estimation by economists surveyed by Dow Jones Newswires. While annual inflation accelerated from 8.27% in May, monthly inflation fell 0.8%, hitting market anticipations of a 0.5% drop. A looser monetary policy would support the Turkish government’s 4% yearly economic growth aim, less than half the 2011 expansion of 8.5%, which was second only to China among the world’s major economies.
Turkey’s GDP enlarged 3.2% in the first 3 months of 2012, when compared with 11.8% in the first quarter of last year. Turkey’s resilient economy stands in direct contrast with those of most neighbours in the EU, particularly in Greece, whose leaders have called on their citizens to emulate the success of Athens’ old rival in getting over from economic hardship. Turkey’s central bank governor has been altering rates daily from 5.76% to 11.4% since October, applying an unorthodox monetary policy to back up the currency and to rein in one of the highest rates of inflation among emerging markets. The central bank cut bank borrowing costs to a two-month low of 8.4% today from as high as 10.1% on June 5.
