A 20 per cent price increase on cigarettes is expected to add up to 1.0 percentage point to Turkey’s inflation, economists say, as Ankara continues to face price instability.
In the wake of last year’s currency crisis which saw the lira lose nearly 30 per cent of its value against the dollar, Turkey’s inflation surged due to heightened import prices.
Inflation topped 25 per cent in October, hitting a 15-year peak, and has eased to just below 20 per cent in March, reports Reuters.
Ankara increased the special consumption tax on cigarettes in January to 67 per cent from 63 per cent, while lowering the minimum fixed tax to zero.
Tobacco companies raised their prices over the weekend, in part reflecting the tax increase, leading to a raise of around two lira per pack of cigarettes.
Economists’ calculations showed the price increase would raise inflation by 0.8 to 1 percentage points.
Cigarettes and tobacco products, along with alcoholic beverages, make up 4.23 per cent of the inflation basket, according to the Turkish Statistical Institute.
The institute lists the average price for a pack of cigarettes as 11.2 lira.