October 16, 2017•Update: October 16, 2017
By Muhammed Ali Gurtas
ANKARA
Turkey ran a budget deficit of 6.4 billion Turkish liras ($1.84 billion) last month -- a 62 percent fall year-on-year -- Finance Minister Naci Agbal said Monday.
Speaking at a news conference, Agbal said: "In the coming months we will control our expenditure, and positive improvements will be recorded on the budget revenues side."
Budget expenditure in September was 54.4 billion Turkish liras ($15.6 billion), up 2.6 percent compared to the same month last year.
Last month, central government revenues stood at 48 billion Turkish liras ($13.83 billion) with a 32.9-percent yearly hike.
"Expenditures without interest payments were 46 billion liras ($13.25 billion) in September, a 1.6 percent decrease on a yearly basis," Agbal said.
In September, interest payments were recorded at 8.4 billion liras ($2.42 billion) and the government received 41.8 billion ($12.04 billion) in tax revenue, up 35.5 percent compared to the same month in 2016.
According to the finance minister, Turkey's nine-month budget balance saw a deficit of 31.6 billion Turkish liras (around $8.7 billion).
Between January and September, government revenues reached 456.6 billion Turkish liras (some $126.8 billion), along with 385.3 billion liras (nearly $107 billion) in taxes collected.
Over the same period, budget expenditures were 488.2 billion liras (around $135.6 billion), including interest payments of 46.2 billion liras (approximately $12.8 billion).
"The nine-month budget deficit stood at nearly half of our end-year target, 61.7 billion liras (some $17.13 billion), according to our medium-term economic program," Agbal said. "I believe that budget balance will give a lower deficit at the end of this year, compared with our target."
In 2016, Turkey ran a 29.3 billion Turkish lira (some $9.7 billion) budget deficit while the budget deficit/GDP ratio was 1.3 percent.
According to the country's medium-term economic program, the budget deficit/GDP ratio target for 2018 is 1.9 percent, 1.8 percent in 2019 and 1.6 percent at the end of 2020.
2018 budget
Details of the central government’s budget for next year were also given by the finance minister. Agbal said: "The lion’s share of the 2018 budget will be for education expenditure, as usual."
Agbal noted that the government will increase education expenditure to 134 billion Turkish liras (over $37 billion), including investments of 14.3 billion liras ($3.97 billion) to amount to around 18 percent of total public investment.
"In other words, for education, we will directly spend 22 liras of every 100 liras collected as tax," he said.
Turkey has targeted a 762.8-billion lira budget expenditure and 696.8 billion liras in revenue in 2018, along with nearly 600 billion Turkish liras in tax revenue, according to the finance minister.
He also stated around 85 billion Turkish liras ($23.6 billion) was to be devoted to public investments, of which nearly 30 percent would be used in the transportation sector while health and agriculture sector investments would see 10 and 12 percent, respectively.
Agbal stressed that public investments would make a significant contribution to economic growth and increase social welfare in 2018.
"In the contents of direct social state applications, we will devote 50.8 billion liras (over $14 billion) for social expenditures in the 2018 budget."
According to the Turkish Statistical Institute, Turkey's economy grew beyond expectations in the first quarter (5.2 percent) and second quarter (5.1 percent) of this year.
Over the past three years, the country's economy expanded 5.2 percent in 2014, 6.1 percent in 2015 and 2.9 percent in 2016.
Ankara is targeting growth of 5.5 percent this year as well as through 2020, according to the country's medium-term economic program announced on Sept. 27.
