Inflation at 7.4% Sees Turkey Miss Target for Third Year Running

Turkey’s central bank missed its annual inflation target for a third year, as consumer prices rose 7.4 percent in the 12 months through December.

Inflation accelerated from 7.32 percent in November, the state statistics office in Ankara said today. The average estimate in a Bloomberg survey of three economists was 7.26 percent.

Food prices and a weakening lira kept inflation above the 5 percent target, the central bank says. It expects core inflation indicators to remain above the target “for a while” as the headline rate declines, according to minutes of the bank’s Dec. 17 interest-rates meeting, where benchmark borrowing costs were kept unchanged.

“Food prices didn’t help inflation in 2013,” Nihan Ziya-Erdem, an economist at Turkiye Garanti Bankasi AS (GARAN) in Istanbul, said by phone yesterday. “Inflation remains elevated due to the weak lira and recovery in domestic demand.” The lira slid 17 percent against the dollar last year.

The currency gained 0.2 percent to 2.1670 per dollar at 10:05 a.m. in Istanbul today, appreciating for the first day in four.

To contact the reporter on this story: Onur Ant in Ankara at oant@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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