Budget performance ‘on track of gov’t forecast’

Budget performance ‘on track of gov’t forecast’

Budget performance ‘on track of gov’t forecast’

Finance Minister Mehmet Şimşek (R) speaks at yesterday’s press meeting held to announce budget results.

Turkey’s three-month budget deficit has totaled 1.5 billion liras, in line with the government expectations, Finance Minister Mehmet Şimşek has said, expressing confidence that year-end objectives would be achieved.

Speaking at a meeting to present first quarter budget figures yesterday, Şimşek said Turkey’s budget revenues had surged 10.8 percent to 104.3 billion liras during the period, but the rise in expenditures outstripped this increase by rising 11.3 percent to 105.3 billion liras.

The budget deficit of the same period last year was 897 million liras, but Şimşek downplayed concerns, saying the government’s budget performance was “positive,” considering the loss of last year’s 5 billion-lira privatization revenue.

“The first quarter budget gap equals only 4.6 percent of our annual deficit forecast of 33.3 billion lira. The performance is in line with the predictions made at the start of the year, there is no serious deviation,” he said.

However, Şimşek also added the government remained cautious. “We will keep financial discipline tight for the remaining nine months. These results show that we will meet our budget targets easily,” he said.

The government’s non-interest budget surplus, meanwhile, was 12.5 billion liras - a 12.6 percent drop compared to same period last year - and the government has therefore acquired 66.5 percent of its year-end target in the first quarter.

Turkey also recorded progress in its tax collection performance, with tax revenues in the first quarter surging by 10 percent to 85.1 billion liras.

Also touching on macroeconomic developments in his remarks, Finance Minister Şimşek said the Turkish economy would grow moderately this year, despite the downward risks.

“Because the political risk perception has significantly decreased after the local elections, there is a serious surge in the April consumer confidence index. The decrease in political concerns is a factor supporting growth. We also see foreign demand picking up slightly,” he said.

He also repeated his expectation of seeing an inflation recovery in the second half of the year and a serious narrowing of the current account deficit throughout the year.

When asked about the recently darkened view of global financial institutions on the Turkish economy, Şimşek said the International Monetary Fund and the World Bank had “acted prematurely” in lowering their forecasts for Turkish economic growth.

The IMF stated on April 8 that Turkish growth would slow more than previously expected in 2014 because of higher borrowing costs, a weaker lira and a sharp fall in private consumption.

Şimşek also told the news conference that he did not expect a delay in the privatization of the state lottery company, adding that 10 firms had received tender documents for the selloff.