Turkey's CPI rises 0.64 percent, PPI falls 0.05 percent in May

The figures, released by the Turkish Statistics Institute, or TURKSTAT, reveal that according to 12-month averages, Turkey’s annual inflation registered 5.24 percent for consumer prices and minus 2.46 percent for producer prices.

In the first five months of 2009, Turkey's consumer prices index rose 1.71 percent, and the producer prices index increased 2.3 percent, the data also revealed.

Turkey’s central bank has cut interest rates by 7.50 percentage points since November, bringing the benchmark rate to a record low of 9.25 percent, as it tries to minimize the effects of a recession.

Last week, the bank said it expected downward pressure on inflation to continue and that it might need to maintain its easing bias for some time.

The bank has already said inflation would undershoot the year-end target of 7.5 percent and that the economy would contract sharply before returning to growth in the last quarter of the year.

The Turkish economy, one of the strongest in the region in recent years, shrank by 6.2 percent in the last quarter of 2008 and the full-year growth rate plunged to 1.1 percent.

The government has said that it expects the economy to contract by 3.6 percent in 2009 while the International Monetary Fund has said that Turkey’s economic contraction would reach 5.1 percent.

Turkey has been involved in lengthy negotiations with the IMF for a fresh loan since a 10-billion-dollar program expired in May last year, but the talks have yet to produce a result.

Turkish Prime Minister Tayyip Erdogan said last week that his government would sign a new stand-by deal if the Fund agreed to Turkey’s demands, but did not elaborate.