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POLL-Turkish inflation to slip in May on cheaper fruits, vegetables

Credit: REUTERS/MURAD SEZER

Turkey's annual inflation is expected to edge down to 19.1% in May thanks in part to a drop in the prices of fruits and vegetables, a Reuters poll showed on Friday.

By Behiye Selin Taner

ISTANBUL, May 29 (Reuters) - Turkey's annual inflation is expected to edge down to 19.1% in May thanks in part to a drop in the prices of fruits and vegetables, a Reuters poll showed on Friday.

In the wake of last year's currency crisis, which have erased some 30% of the lira's value against dollar, overall inflation peaked at a 15-year high above 25% in October. Overall prices have since declined due in part to last year's interest-rate hikes, and inflation stood at 19.50% in April.

Year-on-year estimates ranged between 18.5% and 19.9%, according to the Reuters poll of 13 economists. Month-on-month, inflation is expected to rise 1.3% in May, the poll also showed, with estimates ranging between 0.8% and 1.99%.

"In May, unprocessed food prices might be more supportive when compared to previous months. Fresh fruit and vegetable prices are falling significantly. However, there might be a slight increase due to meat prices," said Ozlem Bayraktar Goksen, chief economist at Tacirler Yatirim.

Turkey's inflation rate slowed a bit in April from a year earlier, helped by more moderate rises in transportation and clothing, even while overall prices remained lofty in the midst of a recession.

"The price rise in clothing will have an impact on inflation due to seasonality," Goksen said.

The median estimate for inflation at the end of 2019 stood at 16.0%, the poll showed, slightly above the government's estimate of 15.9%.

The central bank raised its policy rate to 24% in September. The high borrowing costs combined with surging import prices hit economic activity, driving the economy into recession in the last quarter of 2018.

May inflation data will be released on July 3 at 0700 GMT.

(Writing by Ezgi Erkoyun; Editing by Jonathan Spicer)

((ezgi.erkoyun@thomsonreuters.com; +90-212-350 7051; Reuters Messaging: ezgi.erkoyun.thomsonreuters.com@reuters.net;))

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