(Bloomberg) -- Turkish officials are discussing bypassing some tax raises on goods at the start of the new year to help quell inflation, according to people with knowledge of the matter.
Tax rises on fuel have been highlighted by policymakers in terms of their impact on monthly inflation, the people said. Skipping them could help keep price growth under control and aid the central bank’s efforts in achieving its shorter-term targets, the people said, asking not to be named discussing private conversations. The Treasury and Finance Ministry has yet to make a final decision, the people said.
The ministry declined to comment. The central bank didn’t immediately return a request for comment.
The tax hikes on administered prices and the minimum-wage adjustment for 2025 have been a focus of investor scrutiny because of their impact on the inflation outlook. Investors are looking for an increase of around 25% to the minimum wage to keep price growth in check and central bank targets within reach.
Investors have also been looking for signs of more fiscal consolidation from the finance ministry, particularly in cutting spending. The International Monetary Fund said earlier this month that it recommends “a larger and more frontloaded fiscal consolidation to support disinflation efforts.” The government projects a budget deficit of 3.1% of gross domestic product next year.
Annual inflation slowed to just under 50% in September, and the central bank’s aim is to see it slow it to 38% to 42%. The monetary authority has kept its benchmark interest rate at 50% for the last seven months.
--With assistance from Firat Kozok.
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