Turkey to take budget measures, minister says

Turkey will take measures to tighten fiscal policy after elections on June 24, Finance Minister Naci Agbal said.

The government raised spending last year, widening the deficit, but now it is time to bring the budget deficit ratio to national income back to normal levels, Agbal said.

Turkey has increased spending in the budget through measures including tax cuts and loan incentives in order to strengthen economic growth ahead of the election.

Fiscal targets set by the government will be met, Agbal said. Turkey needs to reduce inflation back to single digits, he said.

Inflation accelerated to 12.2 percent in May, raising speculation that the central bank will increase interest rates at a monthly meeting on Thursday. It was forced to hike the benchmark rate by 300 basis points to 16.5 percent last month and to simplify monetary policy after the lira hit a record low of 4.92 per dollar.