Sep 16 2019

Turkey posts second-straight budget surplus on central bank cash

Turkey reported a budget surplus for the second-straight month in August thanks to the transfer of a remaining tranche of 40 billion liras ($7 billion) in emergency funds belonging to the central bank.

The government posted a budget surplus of 576.3 million liras compared with a deficit of 5.8 billion liras in August last year, the Treasury and Finance Ministry said on its website on Monday.

Other income, which included the one-off central bank transfers, totaled 27.7 billion liras in August. Revenue under that item was 9.36 billion in August 2018. It totaled 35.1 billion liras in July.

Turkey drew on the central bank’s profits earlier than planned in January then withdrew the emergency funds this summer in order to cover a surge in spending. The government is seeking to reverse an economic slump sparked by a currency crisis that peaked in August last year.

The monthly surplus in August reduced the deficit in the first eight months to 68.1 billion liras. The deficit was 50.8 billion liras in the same period of last year. The government’s target is for a deficit of 80.6 billion liras for 2019 as a whole.

Spending climbed by an annual 23 percent to 93.7 billion liras. The increase outpaced consumer price inflation, which accelerated by an annual 15 percent during the month.

Revenue rose by 34 percent to 94.3 billion liras. Revenue from taxation increased an annual 9.3 percent to 66.6 billion liras. Income from value-added tax fell 18 percent to 5.58 billion liras.

Revenue from special consumption taxes, an extra charge that consumers pay on many goods, grew by 16 percent annually to 13.9 billion liras. The government increased special tax rates on alcohol and tobacco, pushing revenue from those items up by 23 percent to 6.5 billion liras, the budget data showed.