The central government budget surplus increased by 11.2% y/y to TRY1.64bn (€534mn) while the primary surplus fell by 35.9% y/y to TRY5.5bn in May, the ministry of finance said on June 15.
Overall budget revenues increased by 11.2% y/y with tax revenues rising by 11.8% y/y in the month, data of the ministry showed. VAT collection was up 14.5% y/y, special consumption tax revenues increased by 20.8% y/y and VAT collection on imports rose by 21.7% y/y in May.
On the expenditure side, the ministry reported that overall spending increased by 11.2% and interest expenditures fell by 45.7% y/y in May.
In the first five months of the year, the central government budget produced a deficit of TRY2.4bn, a 12.4% decline from the same period of 2014. Revenues increased by 12.4% y/y while expenditures rose by 12.1% in January-May, said the ministry.
The government targets TRY20.96bn of deficit (of 1.1% of GDP) and TRY33bn primary surplus this year.
The impact of additional wage hikes for pensioners and civil servants, and a string of micro incentives announced before the elections to support employment and SMEs also remains to be seen, said Deutsche Bank in a post-election commentary on June 12.
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