Turkey’s Albayrak Says Jobs Prioritized Over Fiscal Discipline

(Bloomberg) --

Job creation in Turkey is more of a priority at the moment than fiscal discipline, Treasury and Finance Minister Berat Albayrak said, highlighting efforts to revive economic activity at the expense of the government’s coffers.

The government’s priority is to shield employment and sectors that are affected by the coronavirus pandemic, Albayrak said at a press conference Friday, according to Bloomberg HT. The labor ministry is working on an employment package and the total fiscal support to contain the economic fallout from the coronavirus reached 5% of gross domestic product, or just over $750 billion, as of the first quarter, Albayrak was cited as saying.

A relatively low level of public debt gives authorities some room to contain the economic disruptions from the pandemic. As of 2019, the Turkish government’s debt stock stood at 33.1% of gross domestic product. BNP Paribas SA estimates that government debt-to-GDP in emerging markets will jump by about 8 percentage points to an average of 50% in 2020.

The government still faces fiscal constraints. Turkey ran its largest budget deficit in about a decade last year. The shortfall is widening as measures to contain the pandemic paralyzed economic activity, while spending jumped and tax deferrals chipped away at government revenue.

©2020 Bloomberg L.P.