Turkey runs nearly $7B budget deficit in January-June

By Gokhan Ergocun and Muhammed Ali Gurtas

ANKARA

Turkey ran a budget deficit of 25.2 billion Turkish liras (about $6.9 billion) this January to June, Finance Minister Naci Agbal said Monday.

The budget deficit in June stood at 13.7 billion Turkish liras (approximately $3.9 billion), compared to a surplus of 6.4 billion Turkish liras (around $1.8 billion) in May.

"The budget deficit for the first six months of this year stands at 53.9 percent of the government's end-year targets," Agbal said.

The government is aiming for a budget deficit of 46.9 billion Turkish liras (nearly $12.9 billion) at the end of the year, according to the Finance Ministry.

Turkey’s government ran a 29.3 billion Turkish lira (some $9.7 billion) budget deficit last year.

Agbal said that government revenues in the first six months reached 299.2 billion liras (approximately $82.2 billion), while budget expenditures were 324.4 billion liras (around $89.1 billion), marking an almost $7 billion deficit.

"Fiscal measures to stimulate the economy, like expenditure programs and tax incentives, cost 11.9 billion Turkish liras [some $3.3 billion] in the 2017 budget," he said.

Between January and June, government tax revenues came in at 246.1 billion liras (around $67.6 billion), while interest expenditures reached 27 billion liras (nearly $7.4 billion) over the same period.

Agbal stated that there would be no tax increases or adjustments for the purpose of extra revenue until the end of this year.

"The Turkish economy showed a strong recovery in all respects," he said.

"Last year's coup attempt, terrorist incidents, geopolitical developments, weak foreign demand, and the referendum process... All of them tested the strength of our economy," referring in the last instance to a public vote this April on a series of sweeping reforms to Turkey’s Constitution.

According to the Turkish Statistical Institute, Turkey's economy grew 5 percent in the first quarter this year, compared to the period of January-March 2016.

Over the past three years, the Turkish economy expanded 5.2 percent in 2014, 6.1 percent in 2015, and 2.9 percent in 2016.

The Turkish economy's growth target for the end of 2017 is 4.4 percent, according to the government's medium-term program.