Turkey’s monthly budget deficit almost doubled in March to 43.7 billion liras ($6.4 billion) from the 24.5 billion lira deficit recorded in the same period last year, according to figures released by the Turkish Central Bank (CBRT).
Turkey recorded an annual deficit of 123.7 billion lira in 2019.
According to the Turkish Ministry of Finance and Treasury’s statistics, spending excluding interest payments rose an annual 18.3% to 91.2 billion liras in the last month.
The official figures showed that tax revenues surged 14.1% to 176.1 billion Turkish liras (around $28.86 billion), while interest payments were 38.25 billion Turkish liras ($6.27 billion) in the first three months of this year, state-run Anadolu Agency reported.
Income reached 37 billion lira in March, compared with 41.1 billion lira a year earlier – – a drop of 12.7 percent year on year, Bloomberg reported.
During the January-March period, budget revenues increased by 17.2 percent compared to the same period of the previous year and reached 255.7 billion lira.
Budget expenditures increased by 12.1 percent and reached 285.33 billion lira, meaning there was a budget deficit of 29.581 billion lira.
Turkey’s coronavirus measures slowed down economic activities while tax deferrals chipped away at government revenue. March’s fiscal gap is the biggest going back to 2006, CBRT reported.
Turkey’s President Recep Tayyip Erdogan announced a 100 billion lira stimulus package, consisting largely of tax deferrals, to help various sectors with the tax burden and support the economy during the coronavirus pandemic.
The Turkish lira recorded its lowest rate in 18 months as it weakened to 6.90 against the dollar in early afternoon trading.
Global markets remained flat as investors were highly worried about coronavirus.
Turkey’s BIST 100 index lost 4 percent and retreated up to 94,835 points.
Turkish economists warn that the country will struggle to pay its debts as COVID-19 slows down the economy.
Turkey’s Treasury borrowed 4.2 billion Turkish lira (some $650 million) from domestic markets on 24th March.
“Turkey’s Treasury owes 350 billion lira to the domestic market. How will the government pay this debt without collecting tax…of course, they print (unbacked) money, and pay” Turkish economist Murat Muratoglu from Sozcu daily tweeted.
During the COVID-19 outbreak, housing sales in Turkey increased by 3.4 percent compared to the same month of the previous year, Turkey Statistical Institute’s March housing sales statistics shows.