Turkey’s central government budget posts €869mn deficit in February

By bne IntelliNews March 16, 2015

The central government budget ran a deficit of TRY2.4bn (€869mn) in February versus a TRY1.7bn surplus a year ago as expenditures rise more than revenues in the month.

The central budget also posted a primary surplus of TRY4.53bn in February, representing a 9.3% y/y decline, the ministry of finance said on March 16.

Expenditures increased by 29.8% y/y while revenues showed a 16.6% y/y rise in February, according to data of the ministry. On the expenditure side, interest expenditures jumped 107.1% y/y which the ministry says is temporary and due to the maturity structure of the debt stock. Non-interest expenditures rose by 21% y/y. Commenting on the February budget realisations, finance minister Mehmet Simsek said that the budget deficit seen in February was due to higher seasonal spending on infrastructure and interest. Capital expenditures and capital transfers were up 166% y/y and 205% y/y, respectively, data showed.

On the revenues side, tax collection rose 17.2% y/y with VAT revenues rising only 0.5% y/y, and VAT collection on imports falling 5% y/y, signalling weak domestic demand and economic activity. However, Simsek expects a strong budget performance in the coming months due to a recovery in domestic demand.

The government targets TRY20.96bn of deficit (of 1.1% of GDP) and TRY33bn primary surplus this year.

In the first two months of the year, the budget surplus fell 60.6% y/y to TRY1.41bn while the primary surplus rose 11.7% y/y to TRY13.3bn. Expenditures increased by 14.7% y/y and revenues rose by 11% y/y in January-February.

2015 MONTHLY REALIZATIONS OF CENTRAL GOVERNMENT BUDGET
        (Thousand TL)
  Jan Feb  Total Budget Target
Budget Expenditures 36.341.779 42.510.948 78.852.727 472.942.746
1-Excluding Interest 31.326.769 35.622.371 66.949.140 418.942.746
    Compensation of Employees 12.679.357 9.780.454 22.459.811 119.170.124
    Social Security Contributions 2.168.343 1.676.051 3.844.394 20.324.876
    Good and Service Purchase 1.450.388 2.681.522 4.131.910 41.152.681
    Current Transfers 12.717.930 16.057.020 28.774.950 176.424.780
    Capital Expenditures 1.784.046 2.245.604 4.029.650 40.955.159
    Capital Transfers 181.817 1.191.668 1.373.485 6.797.889
    Lending 344.888 1.990.052 2.334.940 10.544.604
    Reserve Appropriation       3.572.633
2-Interest 5.015.010 6.888.577 11.903.587 54.000.000
Budget Revenues 40.109.175 40.153.409 80.262.584 451.979.400
1-General Budget Revenues 38.851.769 38.269.780 77.121.549 440.997.857
    Taxes 34.876.985 34.612.692 69.489.677 389.501.090
    Property Income 871.063 529.936 1.400.999 9.478.311
    Grants and Aids and Special Revenues 417.940 299.133 717.073 1.932.183
    Interest, Shares and Fines 2.590.612 2.683.163 5.273.775 28.843.105
    Capital Revenues 95.169 133.228 228.397 10.438.998
    Collections from Loans   11.628 11.628 804.170
2-Special Budget İnstitutions 797.763 800.772 1.598.535 7.789.211
3-Regularity & Supervisory Institutions 459.643 1.082.857 1.542.500 3.192.332
Budget Balance 3.767.396 -2.357.539 1.409.857 -20.963.346
Balance Excluding Interest 8.782.406 4.531.038 13.313.444 33.036.654

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