Turkey’s budget gap widens but government relaxed over year-end target

ISTANBUL

Finance Minister Mehmet Şimşek sweats during the annual Embassies' Tennis Tournament in Ankara, Sept. 14. Şimşek has expressed no concern regarding the widening budget gap. AA Photo

Turkey’s eight-month budget performance deteriorated compared to the same period last year, new official data has shown, but the government says it sees no imminent threat to reaching its year-end targets.

According to figures announced by the Finance Ministry, the government’s budget deficit increased to 2.7 billion Turkish Liras in the first eight months of 2014, marking a sharp rise from last year’s 231 million-lira surplus.

In particular, the slide in domestic demand that curbed tax revenues collected from consumption took its toll on budget revenues. For example, the value-added tax (VAT) income of the government plunged by 17 percent on an annual basis, the data announced on Sept. 15 showed.

The government foresees a budget deficit of 33.3 billion liras for the end of 2014, and Finance Minister Mehmet Şimşek said the eight-month performance is compatible with this aim.

“This first eight months’ budget deficit equals 8.2 percent of the year-end target of 33.3 billion liras. Therefore, these figures indicate that we can attain the year-end budget deficit target easily,” Şimşek said.