ISTANBUL: Turkey will hike natural gas prices by between 10-15 percent in early October, Prime Minister Tayyip Erdogan said on Thursday, a further step to shore up public finances as the government tries to remedy a widening budget deficit.
Turkey was Europe's fastest-growing economy last year with an 8.5 percent expansion, but growth has slowed sharply this year, to 2.9 percent in the second quarter, and tax revenues are falling short of budget targets.
Deputy Prime Minister Ali Babacan said last week that the government would miss its budget deficit target of 1.5 percent of national output this year by 1 percentage point.
Officials had said more belt tightening measures were planned after announcing tax hikes last weekend on cars, fuel and alcohol, expected to add 8.5-9 billion lira ($4.7-$5 billion) to government revenues annually.
Erdogan made the comments on the natural gas price hikes in an interview broadcast live on Turkey's NTV television.
The prospect of a rise in natural gas prices has raised concerns about inflation. Much of Turkey's electricity is generated using natural gas, meaning the price rise is likely to have a significant impact on household energy bills.
Turkish bond yields hovered near their highest this month on Thursday as investors fretted about the outlook for inflation.
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