Turkey’s central government’s budget balance saw a deficit of 47.4 billion Turkish Liras ($12.9 billion) last year, Finance Minister Naci Ağbal announced on Jan. 15.
“We revised up our end-year budget deficit forecast for 2017 to 2 percent of the country’s GDP in the last Medium Term Program [MTP],” Ağbal said.
“Fortunately, last year’s budget balance saw a figure [around 1.5 percent of the GDP] below expectations,” Ağbal said. “It is quite satisfactory.”
Last September, the government introduced the country’s new MTP, of which the main objective is to catch sustainable growth performance by maintaining macro-economic stability, resuming fiscal discipline, lowering inflation, and raising the quality of human resources and the labor force.
Even though the central government’s annual budget deficit recorded a 58 percent hike in 2017, compared to 29.9 billion liras ($9.8 billion) of deficit in the previous year, the minister said the government achieved the end-year deficit goal.
The budget deficit to GDP ratio was 1.3 percent in 2016.
As noted in the country’s MTP, the budget deficit to GDP ratio is targeted to be at 1.9 percent in 2018, 1.8 percent in 2019, and 1.6 percent in 2020.
According to Turkey’s Central Bank, the average USD/TRY exchange rate was 3.03 in 2016, while it was 3.65 last year.
Ağbal stated that Turkey’s budget revenue hit 630.3 billion liras ($172.7 billion) last year, marking a 13.7 percent increase year-on-year.
“The government’s tax revenues reached 536 billion liras [$146.8 billion] in 2017,” Ağbal said, noting that tax revenues saw a nearly 16.8 percent yearly hike.
“Turkey’s central government expenditures without interest payments were 621 billion liras [$170.1 billion] last year,” he added.
The government’s annual budget balance saw a non-interest surplus of 9.3 billion liras ($2.6 billion) last year, considering the interest expenditures of 56.7 billion liras ($15.5 billion).
According to the ministry, total expenditures increased by 16 percent on a yearly basis to 677.7 billion liras ($185.6 billion) – including the interest payments.
“Consequently, according to these figures, the fiscal discipline was maintained with respect to the composition of the budget balance,” he said.
Ağbal also said the Turkish economy will show a growth performance beyond expectations for 2017, adding that the average economic growth in the first three quarters of last year was the best performance among OECD countries.
According to the Turkish Statistical Institute (TÜİK), Turkey’s economy expanded 5.3 percent in the first quarter and 5.4 percent in the second quarter of 2017.
In the third quarter, the Turkish economy became the fastest-growing among G-20 countries by showing an 11.1 percent growth performance.