Turkey posts budget deficit of $8B in June

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Turkey’s central government budget revenues reached 268.2 billion Turkish Liras (~$11 billion), while expenditures came in at 487.8 billion liras (~$19 billion) last month, Treasury and Finance Ministry figures showed. 

Accordingly, budget revenues increased by 48.2 percent in June compared to the same month of the previous year, while budget expenditures increased by 130 percent. 

Non-interest expenditures were at 457.4 billion liras ($17.3 billion), while interest payments stood at 37.3 billion liras ($1.4 billion).

Tax revenues amounted to 231.1 billion litas, while general budget non-tax revenues amounted to 30.6 liras. Value-added taxes (VAT) and special consumption tax (ÖTV) collections accounted for 50.52 percent of tax revenues.

In January-June 2023, tax revenue collection increased by 55 percent compared to the same period of the previous year and reached 1.6 trillion liras ($60.8 billion).

In the January-June period, budget revenues increased by 48.6 percent compared to the same period of the previous year and reached 1.88 trillion liras ($71 billion). Budget expenditures increased by 101.7 percent in the same period and reached 2.36 trillion liras ($89.7 billion).

Accordingly, the central government budget posted a deficit of 219.6 billion liras (~$8 billion) in June and 483.2 billion liras ($8.3 billion) in the January-June period.

One US dollar traded for 26 liras on June 30, while a dollar traded for 20.4 liras on average in 2023. 

Şimşek sends circular calling for austerity measures in all public institutions

Treasury and Finance Minister Mehmet Şimşek on July 17 sent a circular to all public institutions and stated that all expenditures, except for those spent for earthquake relief, should be reviewed and excessive saving methods should be implemented. 

On Twitter, he stated, “We will also rationalize public expenditures.” 

Turkey on July 7 woke up to a new wave of substantial tax raises, with the VAT seeing an increase of 2%. Economists forecast that such a hike in VAT will create an extra income of 30 billion liras for the government this year.

The government also has increased the ÖTV and general corporate tax while doubling the motor vehicles tax (MTV).

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