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Turkey Posts Record Monthly Budget Gap as Revenue Takes a Hit

Turkey Posts Record Monthly Budget Gap as Revenue Takes a Hit

(Bloomberg) --

Turkey posted its biggest monthly budget deficit as measures to slow the coronavirus outbreak paralyzed economic activity while tax deferrals chipped away at government revenue.

The central government ran a monthly fiscal gap of 43.7 billion liras ($6.4 billion) in March, the biggest in data doing back to 2006. That compares with a deficit of 24.5 billion liras a year earlier and an annual gap of 123.7 billion liras in 2019.

Turkey began gradually restricting people’s mobility in March and unveiled a 100 billion-lira ($14.9 billion) stimulus package largely consisting of tax deferrals to help businesses ride out the economic storm caused by the pandemic.

Key Insights

  • Spending excluding interest payments rose an annual 18.3% to 91.2 billion liras
  • Tax income dropped 10.1% as the government postponed the collection of value added and income tax. Income reached 37 billion liras in March, compared with 41.1 billion liras a year earlier
  • Revenue fell 12.7% from a year earlier, indicating a significant decrease in real terms when adjusted for consumer inflation of 11.9%

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