Turkish central bank says end of tax cuts boosted inflation

Turkey’s central bank said an end to temporary tax cuts on some durable goods led to an acceleration in inflation in July.

Increases in energy prices had also helped reverse a recent slowdown in consumer price inflation (CPI), the central bank said in a report published on Tuesday.

Turkish CPI advanced to an annual 16.7 percent last month from 15.7 percent in June, the Turkish Statistical Institute said on Monday. Most economists predict that the rate will slow in the third quarter before accelerating again. The government’s year-end target for CPI is 15.9 percent.

The central bank noted that annual increases in food prices continued to slow. A jump in the price of food, stoked by a currency crisis, had helped inflation reach a 15-year high of 25.2 percent in October.

A recent increase in tobacco prices will impact inflation during August, the central bank said.