Türkiye: Central budget surplus of 118.9 billion liras in May

According to the May budget data announced by the Ministry of Treasury and Finance, the central government budget posted a surplus of 118.9 billion liras compared to the 144 billion lira surplus a year ago. In April 2023, the central government budget had a deficit of 132.5 billion liras. Primary surplus, which was 161.9 billion liras in May 2022, reached 221.6 billion liras in May 2023.

As stated in the Monthly Budget Realization Report, central government budget total revenues increased by 72.9% on a one-year basis to 549.4 billion TL. If we look at the factors affecting the budget revenues in May; Tax revenues increased by 75.1% compared to the previous year. Corporate tax made the highest contribution to the budget revenues with 68.3%. Due to the increase in the motor vehicle tax, the special consumption tax increased by 103.9%, the income tax increased by 99.1%, the value added tax on imports increased by 56.1%, the domestic value added tax by 71.6%, the bank and insurance due to the increase in the exchange rate and imports. transaction tax increased by 113.1% and stamp duty increased by 107.9%. Non-tax revenues increased by 42%.

Total expenses increased by 147.7% to TL 430.5 billion. If we look at the factors affecting the budget expenditures in May; Non-interest expenses increased by 110.3% compared to the previous year. Interest expenses increased by 473.4% due to the increase in domestic debt interest expenses. Current transfers increased by 133.8% and made the largest contribution to budget expenditures. Personnel expenses increased by 116%, capital expenses increased by 149.2%, expenditures for the purchase of goods and services increased by 66.4%, SGK state premium expenditures increased by 97.6%, capital transfers increased by 195.3%. Lending expenditures decreased by 10.2%.

When we look at the 2023 cumulative data; In the January-May period, the budget balance posted a deficit of 263.6 billion TL. The budget had a surplus of 124.6 billion TL in the January-May 2022 period. These data show that the performance of the budget as of the 5-month period is more negative compared to the previous year. The primary deficit was 25.7 billion TL, and a primary surplus of 246.5 billion TL was given in the 5-month period of last year. While budget revenues increased by 48.7% compared to the previous year with 1,612.1 billion TL, budget expenditures increased by 95.4% compared to the previous year with 1,875.7 billion TL.

Ratio of budget and primary balance to GDP (12-month cycle)… Source: Ministry of Treasury and Finance, TURKSTAT, Dinamik Yatırım

The budget deficit/GDP target for 2023 is 3.5%. If we look at the potential factors affecting the budget balance, in the first place, the payments related to EYT may cause the budget balance to deteriorate. Earthquake disaster can put pressure on budget expenditures through current transfers and capital expenditures. The slowdown in economic activity in the second half of the year may affect revenues and put pressure on the budget. Considering the increase in budget expenditures, the possibility of creating an additional budget has increased. In this context, we think that an upward revision can be made in the budget deficit/GDP target in the MTP.

Kaynak Dinamik Yatırım- Enver Erkan

Hibya Haber Ajansı