Turkey’s budget deficit rises ahead of snap poll

Turkey’s budget deficit rises ahead of snap poll

Turkey’s budget deficit rises ahead of snap poll

Turkey’s central government budget balance saw a deficit of 20.5 billion Turkish Liras ($5.1 billion) in the January-May period, as election spending rose ahead of the snap election on June 24.

The budget deficit was almost half of this amount at 11.5 billion liras in the same period of 2017.

In a statement on June 18, Finance Minister Naci Ağbal said there was a significant increase in budget revenues in the mentioned period but the government will reach its year-end budget targets.

“In the second half of the year, we will balance the spending side in a controlled manner and saving additional revenues, while not stopping support for the economy,” Ağbal added.

According to the Medium-Term Program (MTN), the budget deficit/GDP ratio target is 1.9 percent this year, 1.8 percent next year, and 1.6 percent in 2020.

In 2017, Turkey’s budget deficit/GDP ratio was around 1.5 percent — below the targets noted in the country’s MTP. 

In the five-month period, Turkey’s budget revenues reached some 302 billion liras ($76 billion), an 18.3 percent annual rise.

This January to May, budget expenditures rose nearly 21 percent compared to the same period last year, totaling 322.5 billion liras ($81 billion).

Interest payments were 31.4 billion liras ($7.9 billion), while tax revenues amounted to 252 billion liras ($63.3 billion) over the same period.

The budget balance excluding interest payments saw a surplus of some 11 billion liras ($2.75 billion) in the January-May period.

The budget saw a 2.7 billion lira ($612.5 million) surplus in May, according to the ministry data.

Last month, Turkey’s budget revenues amounted to 70 billion liras ($15.8 billion), up nearly 22 percent on a yearly basis, according to official data.

Budget expenditures in May were 67.3 billion liras ($15.2 billion), an annual hike of around 32 percent.

Excluding interest payments, the central government budget balance saw a surplus of 8.7 billion liras ($1.97 billion) last month.

The average U.S. dollar/ lira exchange rate in May was 4.42, while one dollar was trading for 3.98 liras on average in the first five months this year, according to the Central Bank.