February budget deficit reaches 7.39 bln liras
Güncelleme Tarihi:
Reuters
Oluşturulma Tarihi: Mart 21, 2009 00:00
ANKARA - Turkey ran a budget deficit of 7.39 billion Turkish Liras ($4.31 billion) in February, the Finance Ministry said Friday, compared with a surplus of 1.021 billion liras a year earlier.
The big jump in the budget deficit is the latest in a series of macroeconomic indicators showing a steep deterioration in Turkey's economy during the credit crisis.
The data showed the budget deficit for the first two months at 10.359 billion liras had nearly met the end-year government target of 10.398 billion liras, making it certain the government will fail to reach end-year targets.
Turkey's once booming economy has slowed sharply with unemployment rising to an all-time high, prompting the government to cut tax rates for cars, household durables and home purchases ahead of local elections on March 29.
The primary surplus, which excludes interest payments on government debt, stood at 2.46 billion liras in February, falling from a surplus of nearly 5.74 billion liras in the same month last year.
The Turkish government set a primary surplus target at 2.41 percent of the gross domestic product for 2009, based on the assumption that the Turkish economy will grow by 4 percent this year.
Main reason
The Finance Ministry said a rise in interest payments was a major reason for the surge in the budget deficit. "Interest payments rose to 9.86 billion liras this year compared to 4.71 billion liras in the same period last year. Interest payments constituted 38 percent of total budget expenditure in February 2009," the ministry said.
The International Monetary Fund, or IMF, expects the Turkish economy to shrink 1.5 percent this year, but economists say it may contract as much as 7 percent.
The data showed budget expenditure jumped 35.5 percent year-on-year in the first two months of the year. Government sources told Reuters this week tax revenue losses will amount to 30 billion liras this year if growth is flat, while tax losses will grow to 40 billion liras to 5 billion liras if the economy shrinks 1 percent to 2 percent.
The data showed the budget deficit for the first two months at 10.359 billion liras had nearly met the end-year government target of 10.398 billion liras, making it certain the government will fail to reach end-year targets.
Turkey's once booming economy has slowed sharply with unemployment rising to an all-time high, prompting the government to cut tax rates for cars, household durables and home purchases ahead of local elections on March 29.
The primary surplus, which excludes interest payments on government debt, stood at 2.46 billion liras in February, falling from a surplus of nearly 5.74 billion liras in the same month last year.
The Turkish government set a primary surplus target at 2.41 percent of the gross domestic product for 2009, based on the assumption that the Turkish economy will grow by 4 percent this year.
Main reason
The Finance Ministry said a rise in interest payments was a major reason for the surge in the budget deficit. "Interest payments rose to 9.86 billion liras this year compared to 4.71 billion liras in the same period last year. Interest payments constituted 38 percent of total budget expenditure in February 2009," the ministry said.
The International Monetary Fund, or IMF, expects the Turkish economy to shrink 1.5 percent this year, but economists say it may contract as much as 7 percent.
The data showed budget expenditure jumped 35.5 percent year-on-year in the first two months of the year. Government sources told Reuters this week tax revenue losses will amount to 30 billion liras this year if growth is flat, while tax losses will grow to 40 billion liras to 5 billion liras if the economy shrinks 1 percent to 2 percent.