Turkey will take further steps to counter food price inflation, Finance Minister Berat Albayrak said yesterday, to combat what he has called “food terror” after food prices surged 31% year-on-year in January.The jump in food prices, fuelled by poor weather, lifted annual January consumer price inflation to 20.35% year-on-year, down from a 15-year high of 25% in October. “We have started taking short-, medium- and long-term steps on food inflation,” he told an exporters’ meeting in Istanbul. “We will not allow some to extend their hands and reach into the pockets of our citizens to take advantage of the situation.” In a meeting with economy correspondents in Ankara on Wednesday, Albayrak had said: “This food terror is an operation against the nation’s throat. Some people are speculating with food,” according to broadcaster NTV.
Albayrak said in yesterday’s speech that municipalities will begin selling vegetable and fruit next week and said action would be taken against those exploiting the surge in prices. “The harshest steps will be taken on this,” he said. He also said agriculture, especially greenhouse farming, would be supported with state loans and regulations concerning wholesalers. Today, details will be announced of a programme to support greenhouses, under which low-interest loans will be provided by the state lender Ziraat Bank, the minister said. He added that a fall in inflation had become visible and there will be decreases in inflation and interest rates as long as fiscal and monetary policy are aligned and structural reforms are carried out.
The central bank said last week it will maintain its tight monetary stance until it is convinced that inflation is falling and will tighten further if necessary, after it trimmed its 2019 inflation forecast to 14.6%. Month-on-month, consumer inflation stood at 1.06% in January, above a 1.0% Reuters poll forecast, with food and non-alcoholic drinks prices surging 6.43% on the month. The year-on-year forecast was 20.29%. Annual inflation had been easing from a 15-year peak of above 25% in October, but the latest figure edged up from December’s 20.3%. The January producer price index rose 0.45% month-on-month for an annual rise of 32.93%. The central bank has said it would aim to bring inflation down to single figures and converge with its target of 5% – its medium-term inflation target – in three years. It has left its policy rate unchanged since September when it hiked 6.25 percentage points to 24%.
Sources and photo-credits: Reutres, Gulf Times