Inflation

The Executive Board of the National Bank of Serbia (NBS) decided Thursday to keep the key policy rate at the level of 6 percent, the central bank said.

Except that it is not! It is true that according to official figures released by the Turkish Statistical Institute on July 3, prices fell 0.5 percent monthly in June, lower than expectations of a 0.2 percent fall. As a result, annual inflation fell almost one percentage point, from 8.1 to 7.2 percent.

The announcement of the Referendum to take place on July 5 caused a multinational corporation to study the affects that the ‘no’ vote would have on society and the Greek economy. The company, that wishes to remain anonymous, studied all the repercussions of ‘no’.

Inflation in Turkey dropped sharply in June with decreasing food prices, the Turkish Statistical Institute (TÜ?K) stated on July 3, but analysts doubt that a further decline is in store. 

The Consumer Price Index dropped 0.51 percent in June from May, bringing the annual inflation rate to 7.20 percent in June from 8.09 percent in May.

According to the latest figures of the National Statistical Institute (NSI) on the index of consumer prices, which were released on Monday, deflation returned to Bulgaria in May.

The monthly inflation stood at negative 0.2 % in May, the inflation since the beginning of the year was 0.7 %, while the yearly inflation was 0.9 %.

Food prices are 20 percent higher than the global average in Turkey due to speculative price-hiking, said ?emsi Kopuz, the head of the Food and Beverages Associations Federation of Turkey (TGDF), adding the country should use imports if it wants to reach its year-end food inflation target of 9 percent. 

The Executive Board of the National Bank of Serbia (NBS) decided on Thursday to trim the key policy rate by 0.5 percentage points and set it at six percent.

The NBS Executive Board points out that the inflation is below the lower limit of the allowed deviation from the target and expected to return within the target range in the second half of the year.

Greek consumer prices fell 2.1 percent year-on-year in May, with the annual pace of deflation unchanged from the previous month, data from the country?s statistics service showed on Wednesday.

Greece?s European Union-harmonized deflation rate slowed, showing prices fell by 1.4 percent in May from a 1.8 percent decline in April.

Turkish annual inflation edged above 8 percent for the first time this May, data from the Turkish Statistics Agency (TÜ?K) showed on June 3. 

The annual rate of inflation rose to 8.1 percent in May from 7.9 percent the previous month, while annual inflation on a twelve month moving average basis rose to 8.45 percent over the same period, according to TÜ?K data. 

By Jeff Black

Mario Draghi is trying to make the euro area a hard place to leave.