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Budget deficit down 41 pct in Q1, gov’t happy
Speaking to reporters during a press conference on the latest macroeconomic developments and the economy’s first quarter performance, Şimşek said the state enjoyed a 21 percent increase in revenue, which reached TL 57 billion in the first quarter, over the same period of 2009 while expenditures rose by 3 percent to reach TL 68.4 billion. Tax revenue increased to TL 47.9 billion in the first quarter, 26 percent higher than the same months of 2009. The minister said the government expects swift recovery, particularly following the Q1 figures.
The non-interest deficit was TL 1 billion in the first quarter while the non-interest surplus reached TL 3 billion in the same period.
As regards last month’s figures, Turkey’s budget deficit reached TL 5.9 billion in March 2010, 32 percent less than the same month a year before. The budget revenue surged by 34 percent to reach TL 17.5 billion while expenditures reached TL 23.4 billion. The state’s tax revenue increased by 34 percent over March 2009 to reach TL 14.5 billion. “We have gotten spending under control, and there has been a greater-than-anticipated increase in revenue,” Şimşek said, evaluating the picture.
Underlining that although world markets, and in particular Asian economies, had entered a noticeable period of recovery, starting from the beginning of this year, Şimşek said the budget deficit and public debts still remain high in most countries. “We are concerned that such problems will continue haunting the markets for some time to come. Economies will be busy dealing with these shortcomings,” he said.
Şimşek said Turkey stands at an advantage, having maintained a strong financial industry and sticking to its own economic program amid the global credit crunch. Recalling that the economy grew 6 percent in the final quarter of 2009 over a year before, the minister said Turkey needs some more time before it can regain its past economic strength. “We will not be surprised to see two-digit growth in the first quarter over the same period of 2009,” he continued, adding that current indices, including capacity utilization, exports and the manufacturing industry, already signal that this is likely. “We owe all these encouraging developments to recent structural reforms applied by our government in the economy,” he explained.
Mentioning Turkey’s unemployment problem, a major burden on the country’s economy, he said the government expects a recovery in employment will be much slower. “World markets will have to live with a serious unemployment problem for a certain time. A genuine recovery could come only following stable growth in markets in the long term.”
The minister said the government expects to allocate more support to such critical fields as health and infrastructure once it reduces the interest burden on the budget. “The state paid 86 percent of tax revenues to interest payments in 2002. This number declined to 31 percent last year, and we are planning to bring this share to below 30 percent this year.”
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