Turkey boosted its fuel taxes by about 200 per cent as the country's central government budget swung to its widest deficit on record.
The move comes after elections won by President Recep Tayyip Erdogan with the help of costly giveaways that risk contributing to one of the biggest fiscal shortfalls in years.
The deficit in June reached 219.6 billion liras ($8.4 billion), compared with a 118.9 billion-lira ($4.5 billion) surplus the previous month, according to data published by the Treasury and Finance Ministry on Monday.
On an annual basis, the gap widened nearly sevenfold.
Since a victory at the ballot box in May gave Mr Erdogan another five years in office, the Turkish leader has installed a new team that is now trying to patch up the budget and scale back policies blamed for destabilising the $900 billion economy.
Apart from Mr Erdogan’s election pledges – which ranged from free natural gas for households for a month to raising pensions and public-sector pay – the budget is also under pressure from the impact of February earthquakes, which inflicted an estimated $100 billion in damages.
On Sunday, the government almost tripled fuel taxes, a move it said would help cover the financing needs of post-quake reconstruction.
In recent weeks, it has also raised levies on a wide range of goods and increased taxes on banks and corporations.
The string of increases may lead to inflation of about 60 per cent at the end of the year, said Cem Cakmakli, an assistant professor of economics at Istanbul-based Koc University.
Even before they were introduced, estimates were around the 50 per cent mark, he said.
“But the wave of hikes from fuel, and especially diesel, will have a broad impact as most of the economic activity runs on diesel,” Mr Cakmakli said.
“We expect massive price increases in food”, considering how critical diesel is to production and transport, he said.
Before the fuel tax increase, Bloomberg Economics estimated Turkey’s annual budget deficit would hit 6.3 per cent of gross domestic product.
“Turkey is standing on relatively firm fiscal ground but we see that likely to change in the near term,” according to Bloomberg Economics.
“With expansionary policies in the lead-up to the elections, the necessary spending on quake-related relief and the expedited rebuilding in disaster-struck areas, we see a wider gap on the fiscal budget in 2023 and beyond.”
Other highlights from the budget report that expenditure rose by an annual 130 per cent, driven by capital and current transfers and personnel wages.
The deficit from January to June stood at 483 billion liras while government revenue rose by 48 per cent from a year earlier on the back of corporate and income taxes.
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
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Other must-tries
Tomato and walnut salad
A lesson in simple, seasonal eating. Wedges of tomato, chunks of cucumber, thinly sliced red onion, coriander or parsley leaves, and perhaps some fresh dill are drizzled with a crushed walnut and garlic dressing. Do consider yourself warned: if you eat this salad in Georgia during the summer months, the tomatoes will be so ripe and flavourful that every tomato you eat from that day forth will taste lacklustre in comparison.
Badrijani nigvzit
A delicious vegetarian snack or starter. It consists of thinly sliced, fried then cooled aubergine smothered with a thick and creamy walnut sauce and folded or rolled. Take note, even though it seems like you should be able to pick these morsels up with your hands, they’re not as durable as they look. A knife and fork is the way to go.
Pkhali
This healthy little dish (a nice antidote to the khachapuri) is usually made with steamed then chopped cabbage, spinach, beetroot or green beans, combined with walnuts, garlic and herbs to make a vegetable pâté or paste. The mix is then often formed into rounds, chilled in the fridge and topped with pomegranate seeds before being served.
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Managing the separation process
- Choose your nursery carefully in the first place
- Relax – and hopefully your child will follow suit
- Inform the staff in advance of your child’s likes and dislikes.
- If you need some extra time to talk to the teachers, make an appointment a few days in advance, rather than attempting to chat on your child’s first day
- The longer you stay, the more upset your child will become. As difficult as it is, walk away. Say a proper goodbye and reassure your child that you will be back
- Be patient. Your child might love it one day and hate it the next
- Stick at it. Don’t give up after the first day or week. It takes time for children to settle into a new routine.And, finally, don’t feel guilty.
MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
UAE currency: the story behind the money in your pockets
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
KILLING OF QASSEM SULEIMANI
more from Janine di Giovanni
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
