The Central Bank of the Republic of Turkey (CBRT) has cut its midpoint inflation forecast for the end of this year to 5.5% from a previous 6.1%, chairman Erdem Başçı said on the 27th January 2015.
At a news conference to announce the bank’s quarterly inflation report, Başçı also stated that the midpoint of the bank’s 2016 year-end inflation forecast was 5%.
The revision of the forecast comes as oil prices continue to slide. Oil was trading at more than US$90 in October, when the central bank prepared its inflation report for 2015. It is now trading at almost half of this, at US$48.
Central bank announces high possibility of interest rates decrease
Başçı has also spoken to the press for the first time since the bank’s decision on the decrease in interest rates on Tuesday, which was criticized by President Erdoğan and government officials for being lower than expectations.
Speaking to Anadolu Agency at the World Economic Forum in Davos last month, Başçı commented that: “In the upcoming period, regarding the first two pillars, it is highly possible for inflation and interest rates to decrease.”
Foreign trade statistics announced by the Turkish Statistical Institute
According to the provisional data, produced with the cooperation of the Turkish Statistical Institute and the Ministry of Customs and Trade, in December 2014, exports were US$13.33 billion with a 1.2% increase and imports were US$21.83 billion with a 5.6% decrease compared with December 2013.
In the same month, foreign trade deficit decreased by 14.6% from US$9.96 billion to US$8.51 billion. In December 2014, exports coverage by import was 61%, while it was 56.9% in December 2013.
Seasonally and calendar-adjusted exports increased by 0.6% while imports decreased by 11.1% compared with the previous month. Calendar-adjusted exports decreased by 2% and imports decreased by 9.3% compared with December 2013.
Ali Ceylan is a partner at Baspinar & Partners Law Firm. He can be contacted at [email protected] .