Outlook for Turkish government finances gloomy – columnist

The outlook for the finances of Turkey’s government is worsening as tax revenue declines and expenditure piles up, according to Ibrahim Kahveci, a columnist for the Karar newspaper.

Tax revenue reported for the month of October showed an annual increase of just 6.5 percent, while inflation was 25.2 percent, meaning real revenue fell. Meanwhile, retail sales are sliding – they dropped 3.1 percent in August, when accounting for inflation, and a further 4.6 percent in September.

Some 463,000 more people have lost their jobs in September and October, according to labour union İŞ-KUR, adding to losses of almost 700,000 in May to August, Kahveci said. The worsening picture for consumers is reflecting on the budget, he said.

The budget balance is expected to worsen further because the government will probably increase wages for public workers by more than 20 percent in January and extend a series of tax cuts, Kahveci said, pointing to March local elections.

Then there are Treasury guarantees for operating income from airports, bridges and roads under build-operate-transfer (BOT) projects that will probably total 13.7 billion liras in 2019, he said.

Kahveci said it was no surprise that the budget deficit in Turkey more than doubled in the first 10 months to 62 billion liras. This worsening trend in government finances could just be the start and may lead to a return to the troubled economic times of the 1990’s unless the government acts responsibly, he said.