Budget gap not encouraging
ANKARA - Hürriyet Daily News
Consumers walk inside a shopping mall in Istanbul. The slower economic activity in recent months is reflected in tax revenues. Minister Şimşek says he is hopeful for economic growth in the second half of the year.Turkey posted a 5 billion Turkish Lira budget deficit in the first four months of 2012 despite a 1.4 million lira gain in April, according to the released yesterday by the finance ministry.
“This is not very encouraging,” said Özgür Altuğ, chief economist at BGC Partners, a brokerage in Istanbul in a note to investors. “The deterioration will become more crystallized with each passing month.”
Finance Minister Mehmet Şimşek also said that the budget performance in April was good, but that the overall slowdown in the economy had led to the deterioration in the overall budget figures.
Budget revenues in April increased by 23.4 percent to 27.7 billion liras. Budget revenues were up 15.5 percent year-on-year to 106.5 billion liras in the first months of 2012. They were around 92.2 billion liras in the same period of 2011.
The primary surplus also rose by 23.3 percent to 16.9 billion liras in the same period. Budget expenditures climbed to 111.5 billion liras from 95.3 billion liras with a 17 percent year-on-year rise.
Meanwhile, tax revenues climbed to 84.4 billion liras, with a 10 percent year-on-year rise. Şimşek said that tax revenues for April were 20 billion liras, up 3.5 percent since April 2011. According to Şimşek, the slowdown in tax revenues was proof that the precautions taken by the government to narrow the current account deficit were working.
“Our indicators show that growth in the economy is going to pick-up momentum in the second half of the year,” said Şimşek, stressing that as the economy picked-up this would also have a direct benefit on tax revenues. He added that the government would do everything in its power to stick to its economic targets.