The Turkish Treasury and Finance Ministry has announced today its budget figures for the month of August 2020, for which a budget surplus of TL 28,220 million (USD 3,850 million) was shown, a 4,799.3% increase on the surplus of TL 576 million recorded in the same month of the previous year.
The Ministry announced total government revenue for August as TL 108,566 million (USD 14,811 million), including tax revenues of TL 98,456 million (USD 13,432 million), and budget expenditure as TL 80,345 million (USD 10,961 million), including TL 11,901 million (USD 1,624 million) in interest payments. August 2020 month end USD 1 = TL 7.33 rate was used.
For the first eight months of 2020, there was a deficit of TL 110,926 million (USD 16,731 million), an increase of 62.9% on the TL 68,106 million deficit for the same period of the previous year. Total revenue was TL 650,506 million (USD 98,115 million), including tax revenue of TL 411,962 million (USD 62,136 million). Total expenditure was TL 761,432 million (USD 114,846 million), including interest payments of TL 91,614 million (USD 13,818 million). The average USD/TL rate used was USD 1 = TL 6.63.
Though a growing budget deficit in Turkey was expected this year as a result of the on-going economic recession and the government propensity to give priority to encouraging growth, fiscal pressures have been further increased by the adverse economic effects of the coronavirus pandemic. With the relaxation of the lockdown as from the beginning of June, consumer demand has recovered somewhat, especially with regards housing and automobiles, but the financial burden placed on households during the lockdown is likely to forestall any resumption of pre-pandemic levels in spending. Indirect tax income is therefore likely to remain depressed. The surplus in August came as a surprise. However, if you compare the year-to-date tax income figures for July and August, you will see that there is an increase in corporation tax of TL 23,182 million in August, whereas the figure was TL 49,933 million for the first seven months of the year. We are led to believe that corporation tax payments which were postponed because of the coronavirus pandemic have been collected in August. The same applies for special consumption tax income which was TL 23.2 billion in August when you compare the two months’ year-to-date figures, whereas the figure was TL 99,505 million for the first seven months of the year. Again, with regards total non-interest other income, there was a total of TL 10.1 billion in this other income recorded in August, whereas the difference is TL 26.4 billion when you compare the two months’ year-to-date figures. The government should explain its budget actual figures in more detail if these figures are to be taken seriously.
The budget deficit for the year of 2019 was TL 123,693 million, a 69.9% increase on the deficit figure of TL 72,813 million for the same period of the previous year. Total revenue for the year of 2019 is TL 875,796 million, including tax revenues of TL 673,315 million, and budget expenditure is TL 999,489 million, including TL 99,940 million in interest payments. Using an average exchange rate of USD = TL 5.65, the deficit for the year of 2019 is USD 21,893 million.
The 2020 budget foresees total expenditures of TL 1,095,461 million, total revenues of TL 956,588 million, and a budget deficit of TL 138,673 million. The budget deficit of TL 110,926 million for the first eight months of 2020 is 80% of the budget deficit forecast for the whole year.
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