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Turkey to cut taxes in several sectors to tackle inflation: minister

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Turkey will cut taxes in several sectors including automotives, white goods and furniture and will continue to take measures to bring down inflation, Finance Minister Berat Albayrak said on Wednesday, Reuters reported.

Turkey will also continue its lower tax regime in housing sales, Albayrak said, hours after the central bank sharply raised its inflation forecasts for this year and next.

Following the announcement the Turkish lira weakened more than 1 percent against the US dollar.

The lira weakened to as far as 5.56 against the dollar, from 5.50 before the announcement.

Shares in Turkey’s white goods maker Arçelik rose 5 percent after the announcement, while car makers Ford Otosan and Tofaş were both up 7 percent.

Turkey has been facing a currency crisis as the lira has lost some 40 percent of its value to the dollar this year alone, causing record high inflation which stood at 24.5 percent annually according to October data.

The Central Bank of Turkey (TCMB) sharply raised its 2018 inflation forecast to 23.5 percent from its previous forecast of 13.4 percent, Central Bank Governor Murat Çetinkaya said on Wednesday, the Hürriyet Daily News reported.

Speaking at the bank’s quarterly inflation briefing, he also said the bank was lifting its 2019 year-end inflation forecast to 15.2 percent from the 9.3 percent announced in the previous report in July.

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