Turkey Caps the Year With Biggest Monthly Deficit on Record

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A spending splurge during back-to-back elections last year, and efforts to revive the economy through fiscal stimulus, pushed Turkey’s monthly deficit to a record high.

The central government’s deficit in December was 30.8 billion liras ($5.2 billion), the widest on record going back to 2006 and up from a gap of 18.3 billion liras in the same period in 2018. Growth in income was subdued on an annual basis, according to data published by the Treasury and Finance Ministry on Wednesday.

That takes the annual deficit to 123.7 billion liras, roughly in line with the government’s projection of 3% of gross domestic product, according to Bloomberg calculations based on most recent GDP data.

Key Insights

  • Spending excluding interest payments rose an annual 19.8% to 99.9 billion liras, compared with a 18.9% annual increase during the year
  • In the meantime, revenue growth remains muted as the economy is only starting to gain momentum
  • Revenue rose 8.4% from year earlier, indicating a drop in real terms when adjusted for consumer inflation of 11.8%
  • Government entities tend to spend more in December in order to use up their allowance, adding extra pressure on public finances


  • The lira was little changed after the data and was trading 0.3% weaker at 5.8977 per dollar at 12:07 p.m. in Istanbul.

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  • The Treasury posted a cash budget deficit of 36.8 billion liras in December
  • The ratio of the central government budget deficit to GDP is seen at 2.9% in 2020 and 2021, and 2.6% in 2022, according to the government’s medium-term program

By: Cagan Koc

Source: Bloomberg

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