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In August, Turkey’s central administration budget balance recorded a TRY-5.8 billion deficit, up significantly from the same month of last year at TRY-0.9 billion, notes Muhammet Mercan, Chief Economist at ING.

Key Quotes

“The monthly outcome reflects accelerating primary spending with 29.4% YoY growth (9.7% in real terms), and a 23.3% YoY jump (4.6% real) in interest expenditures on the back of an uptrend in yields, despite solid revenue generation (at 23.4% YoY, translating into a 4.7% real increase).”

“Accordingly, the primary surplus deteriorated to TRY+2.5 billion, from TRY+4.6 billion.”

“Overall, given the current calls for fiscal prudence, the Medium Term Economic plan to be announced this week will be key for resuming fiscal consolidation and containing contingent liabilities.”

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