= 100 ) ( 12 - month cumulative, billion usd ) imports by eu source : eurostat. current account balance ( cab ) source : cbrt. as you all know, food, energy and import prices also play a great role in inflation forecasts. therefore, before moving on to forecasts, i will briefly talk about our assumptions regarding these variables. the downtrend in commodity prices in international markets, chiefly oil prices, continued in the last quarter of 2015 as well. stemming mostly from the lack of demand from china and other developing economies, this trend caused import prices in the turkish economy to bis central bankers ’ speeches recede in usd terms. therefore, we made downward revisions to assumptions for crude oil prices and usd - denominated import prices with regard to annual averages, we reduced crude oil price assumptions from usd 54 to usd 37 for 2016. also, we revised the assumptions for annual percentage changes in average import prices downwards by 4. 9 points for 2016. we revised the assumed inflation for food prices upwards from 8 percent to 9 percent for 2016 due mostly to the effects of minimum wage adjustments on costs and demand ( chart 19 ). chart 19. revisions in oil and export prices * oil prices * ( usd / barrel ) * shaded area indicates the forecast horizon. source : bloomberg, cbrt. import prices * ( usd, 2010 = 100 ) * shaded area indicates the forecast horizon. source : bloomberg, cbrt. effective as of january 2016, some items with administered prices saw price increases. we estimate that the additional effect on the year - end inflation of the portion of these increases that remain above 5 percent will be 0. 4 points in 2016. in turn, we monitor meticulously how the rise in the minimum wage will affect the budget balance and tax adjustments. as the extent of the effect of wage developments on production costs, aggregate demand and inflation depends on the fiscal policy and the change in employment, we monitor the interaction between the rise in minimum wages and the fiscal policy closely. our mediumterm projections are based on an outlook that tax adjustments and administered prices, excluding those already announced in january, will not exceed the inflation target and will remain consistent with automatic pricing mechanisms. the medium - term fiscal policy stance is based on the medium term program projections covering the 2016 – 2018 period. conditional on this outlook, we expect inflation to improve gradually and reach the 5 - percent target in the medium term. 3. inflation and the monetary policy outlook now, i would

food prices were the main drivers of this higher - than - forecasted rise in annual inflation. in fact, inflation excluding unprocessed food and tobacco was close to the october inflation report forecast in this period ( chart 12 ). the lagged effects of the turkish lira depreciation were particularly evident through the core goods channel. yet, the continued fall of import prices in the fourth quarter limited the rise in cpi inflation. chart 11. october inflation forecasts and realizations ( percent ) chart 12. october inflation forecasts and realizations excluding unprocessed food and tobacco ( percent ) * shaded region indicates the 70 percent confidence interval for the forecast. source : turkstat, cbrt. in the fourth quarter, despite the decline in usd - denominated import prices, cost pressures on inflation continued due to food prices and exchange rate developments. we see that these rising cost factors limit the improvement of the underlying trend of core inflation bis central bankers ’ speeches ( chart 13 ). furthermore, we will monitor closely the effects of the adjustment in minimum wages on overall wages and on inflation ( chart 14 ). chart 13. chart 14. ( seasonally adjusted, annualized 3 month average, annual percentage change ) ( 2003 prices, tl ) core inflation indicators sca - h and sca - i source : turkstat, cbrt real gross minimum wage * real gross minimum wage is obtained by dividing the average gross minimum wage at current prices to the consumer price index in a given year. consumer price index is taken as 2003 = 1. consumer prices in 2016 are based on january 2016 inflation report projections. source : ministry of labor and social security, turkstat, cbrt. in sum, annual inflation increased in the fourth quarter due to an ongoing rise in food prices as well as the lagged effects of the turkish lira depreciation throughout 2015. we believe that the upcoming inflation outlook will depend on both the volatility in energy and unprocessed food prices and the effects of the global market uncertainty on inflation expectations. in addition, the large adjustment made to net minimum wages for 2016 will have an impact on inflation. therefore, we expect inflation to remain elevated for some time. at this juncture, in addition to maintaining our tight monetary policy stance, fighting against the structural elements of inflation also remains important. notwithstanding the significant external shocks in recent years, we were able to limit the worsening in inflation and inflation expectations thanks to our current policy framework,