Turkish budget on track, spending to remain tight: Finance Minister Şimşek

ANKARA – Reuters

Finance Minister Mehmet Şimşek (L) speaks during a press conference. AA Photo

Turkey will maintain tight fiscal discipline in the coming months after data for the first half showed it was comfortably on track to meet its budget deficit targets this year, Finance Minister Mehmet Şimşek said on July 15.

The budget showed a deficit of 613 million lira ($290 million) in June, bringing the shortfall for the first half of the year to 3.4 billion lira, finance ministry data showed.

The budget primary surplus, which excludes interest payments on debt, stood at 960 million lira in June and at 23.1 billion lira for the first six months as a whole.

Turkey is targeting a 33 billion lira budget deficit by the end of the year, as government spending is traditionally much higher in the latter part of the year.

Speaking at a news conference to announce the latest budget data, Şimşek said the negative impact on the Turkish economy of developments in Iraq, Turkey’s second-biggest export market, would be compensated for by recovery in Europe and that Turkey was on track to meet its 4 percent growth target this year.

He said inflation peaked in May and that a downward trend in prices was set to continue, falling in line with the central bank’s forecast of 7.6 percent for the end of the year.

The country holds a presidential election in August and parliamentary polls next year. Heavy and conspicuous public spending was a common phenomenon in the run-up to Turkish elections in the 1990s, but budget discipline has been tighter since its 2001 financial crisis.