Turkey: Inflation rate rises to annual 8.09%

The Turkish inflation rate rose to an annual 8.09 percent in May, the Turkish Statistical Institute said in a report on Wednesday.

The 12-month moving average was 8.45 percent.

"The central bank is finding controlling inflation a bit stickier than expected," said Attila Yesilada, an economist with Turkish securities analyst firm Global Source Partners in Istanbul. "Inflation remains disappointingly high. It should ease a little during the summer months, but it is likely to end the year in the 7.5 to 8 percent range, visibly above the Bank’s latest estimate of 6.8 percent."

The highest monthly increase was 10.06 percent in clothing and footwear.

The highest annual increase was 13.44 percent in hotels, cafes and restaurants.

But, inflation for food and non-alcoholic beverages declined 2.68 percent from the previous month.

"Meanwhile year-to-date  inflation reached 5.3 percent, compared with the central bank's year-end target of 5 percent," commented Gülay Elif Girgin, chief economist at securities analyst Seker Yatirim in Istanbul. “In June and July, we may observe a decline in annualinflation. But for 2015 yearend, our forecast stands at 8.8 percent. Accordingly, we do not expect a rate cut from the central bank. On the contrary, mostly due to pressure from global markets, the bank will have to adjust rates in the coming period, a forced, rather than a proactive action."