Turkey: Inflation Drops Sharply İn July

Inflation in Turkey dropped for the second month in July, the Turkish Statistical Institute reported on Monday.



The annualized inflation rate fell to 6.81 percent in July from 7.2 percent in June.



The Consumer Price Index saw a 0.39 percentage point decline in July from June.



In July, the highest monthly increase was 1.60 percent in furnishings and household equipment, while the largest monthly decline was 4.97 percent in clothing and footwear according to the report.



The highest annual increase was 13.8 percent for hotels, cafes and restaurants.



In the inflation report, published on Thursday by the Central Bank of the Republic of Turkey, Governor Erdem Basci said the bank's mid-point year-end inflation forecast now stood at 6.9 percent, up from 6.8 percent in its last report. It left its 2016 mid-point forecast at 5.5 percent.



While food inflation and energy inflation have declined, helping the annual rate lower, Basci said that the drop in value of the Turkish lira has offset these changes to some extent.



Basci said that further improvement was needed in the inflation outlook. "We forecast inflation to reach our targets in the medium term" Basci said. - Ankara