According to the table of the Ministry of Treasury and Finance showing the central government budget balance in June, budget posted a deficit of 219.6 billion TL in June 2023, compared to a deficit of 31.1 billion TL in June 2022. The primary budget deficit increased significantly from TL 18.3 billion in the same period of the previous year to TL 182.3 billion, indicating a significant deterioration in the government's financial situation.
As stated in the Monthly Budget Realizations Report, Total revenues increased by 48.2% compared to the previous year and reached 268.2 billion TL in June 2023. However, the increase in revenues lagged behind the increase in expenses. Different performances were observed in tax sub-items. Corporate tax, banking and insurance transactions tax and income tax showed the highest annual increases, while value added tax (VAT) on imports decreased significantly by 131.1%. Total non-tax revenues increased relatively slowly at 40.7% YoY in June 2023. There was limited growth in premium sales revenues and other non-tax revenue items of securities issued with negative real interest rates. Inflation-indexed bonds issued with negative interest rates decreased, further limiting the increase in general budget revenues.
Total expenditures increased by 130% to 487.9 billion TL in June 2023, contributing to the widening budget deficit. This significant increase in spending was primarily attributed to post-election and earthquake reconstruction activities. High increases were observed in non-interest expenses, except for two main items. Personnel expenses and SGK state premium expenses experienced the highest increases. While capital expenditures increased by 38.5% compared to the previous year, purchases of goods and services recorded a relatively limited increase by 64.2%.
In the first half of 2023, revenues increased by 48.6% and expenses increased by 101.7%, resulting in a deficit of 483.2 billion TL in the budget balance. The budget had given a surplus of 93.6 billion TL in the January-June 2022 period. Primary balance gave a deficit of 208 billion TL in the first half of 2023, which was 228.2 billion TL in the same period of the previous year.
Ratio of budget and primary balance to GDP (12-month cycle)… Source: Ministry of Treasury and Finance, TURKSTAT, Dinamik Yatırım
The central government budget in June 2023 faced significant challenges as revenue growth failed to match the increase in expenditures, leading to a notable widening of the budget deficit and primary deficit. Various factors, such as tax collection trends and economic activity, will play a vital role in shaping the future performance of the budget. The extent of the slowdown in domestic demand will be important for the overall tax collection performance. In addition, strong increases in expenditures may continue due to post-earthquake reconstruction activities.
Kaynak Enver Erkan / Dinamik Yatırım
Hibya Haber Ajansı