Turkey budget performance ‘good so far’

ISTANBUL - Reuters

Turkish Finance Minister Mehmet Şimşek speaks at a forum.

Turkey’s budget performance is much better than expected so far this year, Finance Minister Mehmet Şimşek said today. However, the credit rating agency S&P struck a contrasting tone, warning that Turkey could face a rise in its budget deficit, mainly due to the upcoming elections and the weakening economic outlook. 

Turkey ran a 3.1 billion lira surplus for the first half of this year.

In a report on 14 emerging European economies, including Turkey, S&P noted that Turkey’s budget deficit may increase up to 3 percent of the GDP in the next two years, but that its current account deficit, the most risky indicator of the Turkish economy, may decrease in the second half of the year due to a prospective shrinkage in the economy and the loss in the value of lira.