Turkish consumer prices rose 11.92 percent in December, official data showed on Wednesday, exceeding Reuters poll predictions and sharply above a government forecast, although below a 14-year peak a month earlier. High inflation is one of the biggest challenges facing the Turkish economy, which has grown strongly after a short-lived downturn following a failed coup in July 2016.
The consumer price index rose 0.69 percent month-on-month in December, the Turkish Statistical Institute said, exceeding a forecast rise of 0.5 percent in a Reuters poll. The government's medium-term programme in September forecast end-2017 inflation of 9.5 percent, while the central bank has an official target of 5 percent, which it has repeatedly failed to meet.
Food and non-alcoholic drinks prices fuelled the inflation with a 1.52 increase month-on-month in December, the data showed. Transport prices rose 1.69 percent. Economists have said the central bank needs to raise interest rates decisively, to underpin the lira currency and arrest price increases. The 14-year inflation peak hit in November added to the pressure, while the central bank's subsequent 50-basis point interest rate hike, its first increase in eight months, was less than expected. Producer prices rose 1.37 percent month-on-month in December for an annual rise of 15.47 percent.