Inflation in Turkey’s economic hub, Istanbul, soared in July as the government implemented tax increases on a wide range of goods to address its budget deficit.
(Bloomberg) — Inflation in Turkey’s economic hub, Istanbul, soared in July as the government implemented tax increases on a wide range of goods to address its budget deficit.
The city’s retail inflation on a monthly basis accelerated about 10% last month, almost tripling the rate recorded in June, according to data published by the Istanbul Chamber of Commerce on Tuesday. That marks the highest monthly jump since April 2022.
On an annual basis, inflation accelerated to around 64% in July, up from 55% the previous month. The chamber, known by its Turkish initials ITO, attributed the acceleration to changes in tax rates, which raised prices across various goods and services.
Turkey last month introduced a string of tax hikes to remedy its massive budget deficit, aggravated by costly election giveaways and reconstruction efforts after February earthquakes. The measures included tripling tax collected on fuel.
The Central Bank of Turkey recently revised its inflation projections, forecasting a year-end inflation rate of 58%, significantly higher than the previous estimate of 22.3%. The bank cited the tax measures as one of the reasons behind this revision.
Read more: New Turkish Central Banker Redraws Inflation Path But Not Policy
Turkey’s state statistics agency will publish headline inflation data on Thursday.
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