Turkish central government budget runs EUR 550mn surplus in February.

By bne IntelliNews March 17, 2014

The central government budget, that produced a deficit of TRY 1.45bn in February 2012, posted a surplus of TRY 1.7bn (EUR 550mn) in Feb 2013, data of the ministry of finance showed on Monday. The primary surplus rose by 41% y/y to TRY 4.99bn in February.

Budget revenues were up 5.9% y/y but expenditures fell 3.5% y/y, the ministry said. Looking at the breakdown of the revenues; tax revenues rose 7% y/y with VAT increasing 24.9% y/y and special consumption tax collection rising 15.5% y/y. Import tax revenues fell 0.8% which may be seen as a sign of slowing imports. This is good news for the current account deficit which is expected to improve this year as the economic activities and the country’s imports slow.

On the expenditure side; the ministry data show that interest expenditures declined 33.4% y/y and non-interest expenditures rose by a limited 1.7% y/y. Government’s capital expenditures and current transfers, that soared 544% y/y and 3,698% y/y, respectively, in January; contracted 65.1% y/y and 4.5% y/y in February.

In the first two months of the year, the budget surplus fell 20.4% y/y to TRY 3.58bn and primary surplus declined 19% y/y to TRY 11.92bn. Revenues were up 4.3% y/y and expenditures rose 6% y/y in January-February.

Commenting on the budget realisations, finance minister Mehmet Simsek said that the budget performance was very strong in the first two months of the year. This strong performance indicates that the year-end budget targets will be achieved, according to the minister.

This year, the government targets a budget deficit of TRY 33.3bn (1.9% of GDP) and a primary surplus of TRY 18.7bn (1.1% of GDP). Note that, these forecasts were made under the assumption that the Turkish economy will grow 4% this year.

Thousand TRY  Jan Feb  Jan-Feb total Budget Target
Budget Expenditures 36,001,255 32,755,956 68,757,211 436,432,901
1-Excluding Interest 30,985,358 29,430,443 60,415,801 384,432,901
    Compensation of Employees 11,544,736 8,941,706 20,486,442 109,969,100
    Social Security Contributions 2,000,454 1,531,904 3,532,358 18,874,583
    Good and Service Purchase 1,346,304 2,259,364 3,605,668 37,590,028
    Current Transfers 13,267,874 14,131,952 27,399,826 163,553,913
    Capital Expenditures 2,007,615 844,760 2,852,375 36,688,695
    Capital Transfers 116,685 390,304 506,989 6,518,197
    Lending 701,690 1,330,453 2,032,143 7,645,162
    Reserve Appropriation       3,593,223
2-Interest 5,015,897 3,325,513 8,341,410 52,000,000
Budget Revenues 37,907,936 34,424,289 72,332,225 403,174,813
1-General Budget Revenues 36,883,868 32,726,072 69,609,940 392,967,693
    Taxes 32,706,946 29,522,848 62,229,794 348,352,781
    Property Income 1,246,578 540,842 1,787,420 8,140,485
    Grants and Aids and Special Revenues 344,803 87,656 432,459 1,556,477
    Interest, Shares and Fines 1,800,914 1,862,165 3,663,079 26,025,984
    Capital Revenues 776,380 681,363 1,457,743 8,749,559
    Collections from Loans 8,247 31,198 39,445 142,407
2-Special Budget İnstitutions 640,117 842,554 1,482,671 7,222,934
3-Regularity & Supervisory Institutions 383,951 855,663 1,239,614 2,984,186
Budget Balance 1,906,681 1,668,333 3,575,014 -33,258,088
Balance Excluding Interest 6,922,578 4,993,846 11,916,424 18,741,912
Source: Ministry of Finance

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