ADVERTISEMENT

Turkish Budget Gets Buoyed in July by Central Bank Reserve Funds

Turkish Budget Gets Buoyed in July by Central Bank Reserve Funds

(Bloomberg) --

Turkey posted its first budget surplus in six months after the central bank transferred around 20 billion liras worth of so-called reserve funds to the government in July.

The central government’s budget surplus was 9.9 billion liras ($1.78 billion) in July compared with a surplus of 1.13 billion liras in the same period a year earlier. Income rose by an annual 51.1% in the month and spending rose 37.6%.

Turkish Budget Gets Buoyed in July by Central Bank Reserve Funds

Key Insights

  • Spending excluding interest payments rose an annual 44.2% to 75.8 billion liras. In the meantime, revenue growth remains subdued as the economy struggles to gain momentum after exiting a technical recession in the first quarter
  • Parliament passed a law in July to allow the central bank to transfer cash to the government by reducing the amount the monetary policy authority must set aside in a so-called lira reserve fund; the latest central bank data show the monetary authority transferred around 20 billion liras from this pool in July
  • Tax income rose an annual 7.3% in July, indicating a significant drop when adjusted for consumer inflation of 16.7%

Get More

  • Turkey ended some provisional tax cuts for furniture, white goods and cars in July
  • Earlier this month, the Treasury posted a July cash budget surplus of 4.1 billion liras

To contact the reporter on this story: Cagan Koc in Istanbul at ckoc2@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Lin Noueihed at lnoueihed@bloomberg.net, Constantine Courcoulas, Taylan Bilgic

©2019 Bloomberg L.P.