Turkey Seeks Economic Stability – OpEd

Turkey’s economy is in a bad way. In June the budget deficit, seven times higher than a year earlier, reached 219.6 billion lira ($8.37 billion). The forecast for July shows it widening still further.
On July 16 Turkey raised the tax on gasoline, adding to the recent two percent increase to VAT (value added tax) and five percent hike to corporation tax. Aimed at tackling the budget deficit, those tax hikes will have the deleterious side-effect of stoking inflation, which stood at 38 percent in June. Two days after the tax hike, the Turkish lira weakened to a record low of 26.6 against the dollar.