Turkey: Primary balance improves in September – ING

Muhammet Mercan, Chief Economist at ING, notes that the Turkey’s central administration budget balance recorded a TRY-6.0 billion deficit in September, down from the same month of last year at TRY-6.4 billion.

Key Quotes

“The monthly outcome shows strong revenues from non-tax items while primary spending maintained a strong growth rate, at 23.6% YoY (though slightly negative in real terms at -0.8%), and a 21.6% YoY increase (-2.3% real change) in interest expenditures on the back of an uptrend in yields. Accordingly, the primary surplus more than doubled to TRY+4.3 billion from TRY+2.0 billion.”

“Following fiscal easing since mid-2016, which has continued to be evident in this year’s budget metrics, the medium term programme (MTP) - a key policy action from the government- anticipates strong fiscal performance and a return to fiscal discipline next year. Accordingly, the MTP shows the central administration budget balance-to-GDP ratio remaining under control and the size of the primary surplus-to-GDP is expected to gradually improve and return to pre-2016 levels in 2021.”