Turkey inflation rate eases but still stubbornly high in December

Economists forecast that double-digit core inflation would persist throughout the first half of 2018. (AFP)
Updated 03 January 2018
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Turkey inflation rate eases but still stubbornly high in December

ANKARA: Inflation in Turkey eased slightly in December after reaching the highest rate in 14 years the month earlier, but remained stubbornly high at almost 12 percent, in a continued headache for policymakers, according to statistics released Wednesday.
Consumer prices rose by 11.92 percent year-on-year in December, the Turkish statistical institute said, down slightly from 12.98 percent in November, which was the highest annual rate recorded since 2003.
On a month-on-month basis, inflation stood at 0.69 percent in December from November, with the biggest price hikes seen in transportation, while clothing prices declined.
The Turkish central bank’s official inflation target is an annual rate of five percent, but double-digit data over the last months have made a mockery of this.
Nevertheless, the bank has been unwilling to make any substantial rate hikes to combat inflation, as President Recep Tayyip Erdogan is wary that raising borrowing costs could put the brakes on growth.
Economists at QNB Finansbank in Istanbul said the December reading of 11.92 percent was the highest year-end figure since 2003.
They forecast that double-digit core inflation would persist throughout the first half of 2018 and could take longer to fall if the lira stayed weak.
“We think inflation will continue to ease over the coming months,” added William Jackson, economist at Capital Economics in London, arguing the latest reading would take some pressure off the central bank for further tightening.
“Even so, headline inflation is likely to remain in double digits until late this year,” Jackson said in a note to clients.
Erdogan has built his popularity on solid stewardship of the economy in the wake of Turkey’s devastating 2000-2001 financial crisis. Any signs of economic weakness would be a bad omen for the Turkish strongman as he prepares for 2019 elections.
Turkey notched up impressive growth of 11.1 percent in the third quarter, but economists warn this masks growing risk factors, such as inflation and a high current account deficit.


Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

Updated 20 July 2018
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Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

JEDDAH: A potential deal to buy a stake in petrochemical maker SABIC would affect the time frame of Saudi Aramco's initial public offering (IPO), the oil firm's president and CEO Amin H. Nasser said Friday. 

The IPO of around 5 percent of Aramco, which was initially to take place this year but is now more likely to happen later, would be the world's biggest listing, raising up to $100 billion.

Nasser said that buying a stake in a chemical company like SABIC would positively affect Aramco's revenue, Al Arabiya reported.

“We are still in the very early stages of the discussion to buy a stake in SABIC,” the Aramco CEO said.

“Aramco is ready for the initial offer and the timing remains subject to the state's decision.”

Saudi Aramco said on Thursday it is looking at the possibility of buying a stake in SABIC, a move that could boost the state oil giant’s market valuation ahead of the planned IPO.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund (PIF) to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, PIF also said talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.