Turkey's inflation rate approaches 8 percent

Turkey's annual consumer inflation rate rose to 7.95 percent in September, driven by the rising cost of food and other goods and services, according to official figures released Monday.

The Consumer Price Index (CPI) stood at 7.14 percent in August, the Turkish Statistical Institute (TurkStat) reported.

Transport and everyday goods and services saw the highest monthly rise - up 1.93 points on August. The greatest price fall was for clothing and footwear, which saw a 2.76 point drop.

Emrah Birol, an Istanbul-based economist with GCM Securities, said rising inflation was a major concern in Turkey's economy.

“Generally in emerging economies such as Turkey inflation targets are set around 2 percent," he told Anadolu Agency. “Some developed economies try to boost inflation to 2 percent. In this context, we are struggling to stem inflation with no success.

“Such a negative outlook on inflation puts the central bank in a difficult position. And since the central bank seems unwilling to intervene in the markets with a rate hike, this puts pressure on the lira."

Turkey's lira has depreciated greatly in recent months, currently standing at around 2.99 to the U.S. dollar.

TurkStat said the domestic producer price index - a leading CPI trend indicator - increased 1.53 points on August.

The inflation rate is calculated by monitoring prices at more than 27,000 shops across Turkey's 81 provinces.

On Sept. 22, the Turkish Central Bank kept its key interest rates unchanged with the inflation outlook being a key factor in the decision.

The bank said future monetary policy decisions would depend on improvements in the inflation outlook.

Birol predicted any rate changes would only come after the general election on Nov. 1.