UAE/TURKISH BUSINESS RELATIONS

UAE/TURKISH BUSINESS RELATIONS

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  • Dr. Nilgün Birgören
    Dr. Nilgün Birgören    Premium Member   Group moderator
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    Turkish budget posts high surplus in February
    Turkey’s February budget produced a surplus of 988 million Turkish Liras, after a deficit of 2.3 billion liras a year earlier, as the cost of supporting the health and pensions systems fell, the Finance Ministry has said.

    Excluding interest payments on debt, the budget produced a surplus of 7.2 billion liras, compared with a surplus of 2.3 billion liras a year earlier, Bloomberg quoted from a ministry statement Tuesday. The cumulative ex-interest surplus in the first two months was 12 billion liras, or 86 percent of the full-year target, Bloomberg said.

    Tax revenue climbed 31 percent to 21.1 billion liras in February from a year earlier.

    Non-interest spending declined 1.8 percent from a year earlier, helped by a drop in budget transfers to the health and pensions system, the ministry said. Spending on interest rose 35 percent.

    The data points toward successful fiscal discipline, according to Özgür Altuğ, chief economist at BGC Partners, who noted that the general elections would be held June 12. “February’s central government budget figures point to successful fiscal discipline, which should calm ratings agencies and encourage them to upgrade Turkey’s credit rating despite the country’s current account deficit problem,” Altuğ said in a note to investors.

    Altuğ noted that with the February figures, the budget balance in the first two months of the year produced a surplus of 2 billion liras, compared to a deficit of 5.4 billion liras in the same period of last year.

    “Non-interest expenditures, which are generally seen as a proxy for election spending, registered only a 5.3 percent [annual] increase in January-February, while tax revenues recorded 22 percent growth,” Altuğ said. “Strong corporate tax and VAT collections contributed positively to the rock-solid budget performance.”

    The figures display a support for the current monetary policy, according to Banu Kıvcı Tokalı of Destek Securities. “The ex-interest surplus has increased to 12 billion liras in the first two months of the year, attaining 86 percent of the year-end target from today,” Tokalı said in a note to investors.

    “The high level of taxes from imports show that imports will remain high in February, too,” Tokalı said. “[Thus], close observation from public authorities toward the expansion of commercial loans is expected to continue.”

    The Turkish government is aiming for a budget deficit of 33.5 billion liras this year, or about 2.8 percent of gross domestic product, after beating its budget goals in 2010. The economy is expected to have grown more than 8 percent last year.

    Source: BBC
    This post was modified on 16 Mar 2011 at 12:42 pm.
    • 15 Mar 2011, 4:54 pm