ANKARA, July 3: Consumer prices in Turkey decreased by 0.24 per cent in June from the previous month but increased by 8.60 per cent on a 12-month basis, the Turkish Statistics Institute said on Tuesday.

Producer prices decreased by 0.11 per cent from May to June, bringing wholesale inflation over 12 months to 2.89 per cent, it added.

In 2006, inflation reached 9.65 per cent, nearly double the year-end target of 5.0 per cent set in an IMF-backed austerity programme.

Authorities remain optimistic that the 2007 target of 4.0 per cent was within reach, provided tight monetary policies are implemented.

The government has pledged to maintain fiscal discipline ahead of early legislative elections on July 22.

Fighting inflation is a key element in a three-year economic stability programme that Turkey is implementing with the support of a $10bn loan from the International Monetary Fund.

The deal expires next year.

IMF-backed tight financial policies have helped the government beat inflation targets over the past three years, bringing the rate from 29.7 per cent in 2002 to 7.7 per cent in 2005.

—AFP