EconSource: Turkey Misses Inflation Target for Fifth Consecutive Year
Turkey’s annual inflation overshot its 5 percent target for a fifth year running in 2015, data showed on Monday, as the annual inflation rate rose to 8.81 percent in December.

Deputy Prime Minister Mehmet Simsek said battling inflation would be this year’s main economic challenge. “The general trend in the inflation rate is not at desired levels and our inflation performance is relatively poorer than our general macroeconomic performance,” he said. The lira also weakened, heading for a three-week low. The lira weakened 20 percent against the dollar in 2015, the most since 2008. Meanwhile, Turkey hiked taxes on tobacco and alcohol and increased electricity prices in an effort to fund investment and production. Taxes on alcoholic beverages were raised by between 12 and 15 percent, and the minimum fixed tax rate on cigarettes rose by 5 percent. Electricity prices rose by 6.8 percent for the first quarter of 2016. Simsek said the government would aim to promote fiscal discipline in 2016. [Reuters, 1/4/2016]
Oman plans to cut subsidy spending by almost two thirds this year to tackle a budget deficit caused by low oil prices, the Finance Ministry said Saturday. Subsidies on utility bills, housing loans, fuel and other goods will stand at 400 million rials ($1 billion) in 2016, down from 1.11 billion rials in 2015. Last week, Oman’s cabinet approved fuel subsidy reforms, spending cuts, and tax increases to bring the deficit under control. The government is forecasting a deficit of 3.3 billion rials this year, or 13 percent of gross domestic product (GDP). Later on Saturday, the government released a five year plan to halve the economy’s dependence on the oil industry as low crude prices pressure government finances. The 2016-2020 plan, set out in a statement by the Supreme Council for Planning, said over 500 programs and policies would seek to diversify the economy into sectors such as manufacturing, mining, transport, and tourism. The plan aims to cut the oil industry’s contribution to GDP to 22 percent from 44 percent. [Reuters, 1/2/2016]
Egypt’s outstanding arrears to foreign oil companies rose to $3 billion at the end of December from $2.7 billion at the end of October, Petroleum Minister Tarek al-Molla said Sunday. The ministry had said in September that Egypt aimed to reduce the arrears owed to foreign oil companies to $2.5 billion by the end of 2015 and to pay them off completely by the end of 2016. Delays in paying back foreign petroleum companies had discouraged investment, but a drive to increase the price paid for domestic production and pay back arrears had encouraged new contracts signed in 2015. Molla did not provide further detail on why total arrears have risen since November. [Reuters, 1/3/2016]
Libya’s internationally recognized eastern government has approved plans to expand the Tobruk refinery and to open two other refineries. The plans were discussed during a cabinet meeting on December 29, according to an official statement. “The National Oil Corporation (NOC) has been granted permission to increase the capacity of the Tobruk refinery to 300,000 barrels [per day] (bpd) as well as construct a 20,000 bpd refinery in Zueitina and a 30,000 bpd refinery in the southern region,” the statement said. The cabinet also approved plans for a petrochemical complex in Benghazi, but no further details were given. [Libya Monitor (subscription), 1/4/2016]
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