Minister feels confident on 4 pct growth, budget deficit

Minister feels confident on 4 pct growth, budget deficit

Turkey’s economic growth will reach 4 percent and inflation will fall to 5.3 percent this year, Finance Minister Mehmet Şimşek said during a press meeting yesterday. However, the World Bank has alerted the country of a wider current account deficit in light of this growth.

Şimşek said the economy grew 3 percent last year and was expected to increase at least 4 percent in 2013, adding that inflation will fall to 5.3 percent this year from 6.16 percent in 2012.

World Bank’s country director for Turkey, Martin Raiser, echoed the minister’s statement yesterday of 4 percent growth this year, though he projected the inflation rate would decrease slowly to 6.1 percent in 2013 and 5.2 percent in 2014.

Yet the World Bank warned that the country’s current account deficit, an indicator of countries’ competitiveness and fiscal stability, would widen from 6.8 percent in 2012 to 7 percent of national output this year and narrow again to 6.8 percent in 2014.

“Turkey’s economy had a soft landing in 2012 for the first time in the country’s recent economic history, with external and internal balances improving significantly. Despite the adjustment, the current account deficit remains large and Turkey’s dependence on short-term financing is a critical vulnerability,” the World Bank said in an economic note on Turkey, published twice yearly.

Şimşek said that central budgetary expenses were 360.5 billion Turkish Liras and central budgetary incomes were 331.7 billion liras, while the budget deficit was 28.8 billion liras in 2012.

Budget expenses increased by 14.6 percent and budget incomes showed an 11.7 percent hike last year when compared to 2011’s figures. While the target budget deficit was determined as 21.1 billion liras, 2012’s figures surpassed it, Şimşek said.