Turkey’s government on Wednesday sought to shore up deteriorating public finances by raising taxes on petrol and restaurant meals, measures that economists said would increase reliance on indirect taxes, slow disinflation and encourage smuggling.

Higher fuel taxes will add around 8 per cent to pump prices, reversing the effect of tougher price caps energy regulators had just imposed on retailers. Value added tax on meals at higher class restaurants and hotels will rise from 8 to 18 per cent, cancelling a concession made to help the tourism sector during the avian flu outbreak.