The central government budget posted a deficit of TRY 18.45bn (EUR 6.2bn) last year versus TRY 29.4bn deficit in 2012, data of the finance ministry showed on Wednesday. The budget shortfall was lower than the government’s revised projection of TRY 19.4bn (or 1.2% of GDP).

The central budget also produced a primary surplus of TRY 31.5bn in 2013 which is slightly higher than the government projection of TRY 31.1bn (or 2% of GDP).

Budget expenditures rose 12% y/y to TRY 407.9bn, (government estimate: TRY 406.6bn) with interest expenditures increasing only 3.2% y/y to TRY 50bn. Revenues increased 17.1% y/y to TRY 389.4bn (government estimate: TRY 387.2). Tax revenues were up 17% y/y with import tax collection rising 25.5% y/y, VAT revenues rising 20.3% y/y and special consumption tax increasing 19.2% y/y.

In December alone, the central government budget posted a deficit of TRY 17.2bn (EUR 5.76bn), representing a 7% y/y increase while it generated a primary deficit of TRY 15.2bn versus a TRY 14.4bn of primary deficit in the same month of the previous year.

Data showed that import tax collection was up 31.4% y/y in December, suggesting that demand for import goods remained strong. Revenues from the Special Consumption Tax (STC) collection rose by 7.3% and VAT revenues increased by 31.4% y/y in the month. The government raised the SCT on new cars, tobacco products, alcohol and cellular phones. TRY 2.75bn (EUR 926mn) in revenue from the SCT hike is expected, and this revenue had been already projected in the 2014 budget, government sources told Reuters earlier this month.

The 2014 budget targets a budget deficit of TRY 33.3bn (1.9% of GDP) and a primary surplus of TRY 18.7bn (1.1% of GDP). These forecasts were made under the assumption that the Turkish economy will grow 4% this year.