Turkish central government budget runs €1.25bn surplus in November

By bne IntelliNews December 15, 2014

The central government budget posted a surplus of TRY3.6bn (€1.25bn) in November versus TRY6.4bn surplus a year ago, the ministry of finance said on December 15. The primary surplus declined 17% y/y to TRY6.8bn in the month.

Expenditures rose 16.8% y/y with non-interest increasing 12.8% y/y and interest expenditures rising 81.3% y/y. The increase in interest expenditures was temporary and it was due to the maturity structure of the debt stock, the ministry said. Interest payments amounted to TRY48.5bn in the first eleven months of the year. The government forecasts interest payments to be TRY52bn this year.

Revenues were up 6.2% y/y in November, with tax revenues rising 6% y/y and non-tax revenues showing an 11.5% y/y increase. VAT collection was up only 3.7% y/y, suggesting that domestic demand is still mediocre. VAT on imports declined 6.3% y/y, another sign of weak demand.

In the first eleven months of the year, the central budget produced a deficit of TRY11.3bn versus TRY1.2bn deficit in the same period of 2013. The primary surplus fell 20.6%y/y to TRY37.1bn in January-November. Revenues rose 8.4% but expenditures increased at a faster pace of 11.2% y/y.

The government initially projected a budget deficit of TRY33.3bn (or 1.9% of GDP) for 2014, but, it revised its forecast, trimming the budget deficit estimate to 1.4% (TRY24.4bn) of GDP.

	November		Jan-Nov		2013	2014	y/y
(TRY bn)	2014	y/y	2014	y/y	Realization	Budget	(%)
Revenues	39.2	6.2%	386.9	8.4%	389.7	403.2	3%
Tax Revenues	35.1	6.0%	321.7	7.4%	326.2	348.4	7%
VAT Revenues	3.1	3.7%	35.4	-0.6%	38.0	39.6	4%
SCT Revenues	8.5	11.1%	82.2	5.6%	85.5	89.4	5%
Import Tax Revenues	5.5	6.3%	57.9	2.4%	62.7	64.8	3%
Expenditures	35.6	16.8%	398.2	11.2%	408.2	436.4	7%
Interest Expenses	3.2	81.3%	48.5	0.9%	50.0	52.0	4%
Budget Balance	3.6	-43.9%	-11.3	-813.5%	-18.5	-33.3	79%
Primary Balance	6.8	-17.0%	37.1	-20.6%	31.4	18.7	-40%
Source: ministry of finance

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