- Category: Economy
- Published on Wednesday, 01 August 2018 10:21
Turkey’s Central Bank sharply raised its 2018 inflation forecast to 13.4 percent from 8.4 percent previously, governor Murat Çetinkaya said on July 31, 2018.
Speaking at the bank’s quarterly inflation briefing, Çetinkaya also said the bank was lifting its 2019 year-end inflation forecast to 9.3 percent from the 6.5 percent announced in the previous report in April.
The revisions follow a leap in consumer price inflation to a 14-year high of 15.39 percent in June, which has helped drive the lira beyond 4.9 to the dollar in recent weeks, despite interest rate hikes of 500 basis points since April.
The lira, which has lost around a fifth of its value this year, stood at 4.9150 per dolar at noon.
Data from the second quarter suggested economic activity was decelerating and had started rebalancing, Çetinkaya said.
Turkey's state pipeline operator Botaş will hike the price of natural gas used for electricity production by 50 percent as of Aug. 1, sources said.
The price hike was "inevitable" due to a weaker lira pushing oil and natural gas prices higher, as Turkey is mostly dependent on energy imports, energy sources told Reuters.
Earlier on July 31, the central bank hiked its crude oil price assumption to $73 from $68.
The increased natural gas prices are based on an exchange rate of 4.86 lira to the dollar, but the payments of producers will be calculated based on the official spot rate of the payment day, the sources said.
Botaş said later on July 31 it had raised natural gas prices for residential use by 9 percent effective Aug. 1.
Also on July 31, the energy regulation authority raised electricity prices by 14 percent for industrial use and by 9 percent for residential use effective Aug. 1, the country's Official Gazette said.
Almost a third of Turkey's total 293 billion megawatt power production came from natural gas power plants in 2017.
The price of natural gas for producers rose to 1,312 lira ($267) per 1,000 cubic metres, sources told Reuters.
Source: Turkey’s Central Bank/ Reuters