Turkish government raises defense budget for next year

ANKARA

The general budget allocated 386.3 ($193 billion) billion liras to the public institutions for next year. The biggest share of the 2014 general budget was allocated to the National Education Ministry with 78.5 billion liras. AA photo

The new medium-term economic plan has raised the budgets allocated to the defense and security institutions in the general budget, while Finance Minister Mehmet Şimşek said the government paid attention to the budget discipline and budget performance figures of this year, which were better than anticipated.

The general budget allocated 386.3 ($193 billion) billion Turkish Liras to the public institutions for next year. The budget allocated for national defense and security rose from 45.3 billion liras for this year’s budget to 49.6 billion liras for next year, with a 9.5 percent increase. The mid-term economic outlook announced this week spared 21.8 billion liras for the National Defense Ministry, 16.6 billion liras for the Turkish National Police, 452 million liras for the Turkish Coast Guard Command, 6.2 billion liras for the Gendarmerie General Command, 1 billion liras for the National Intelligence Service and 3.5 billion liras for the Ministry of Internal Affairs.

Moreover, the biggest share of the 2014 general budget was allocated to the National Education Ministry with 78.5 billion liras, Şimşek announced during the press meeting about the 2014 Central Budget Draft Code. The second biggest share was allocated to the Ministry of Health with 75 billion liras, he said. The draft code on the 2014 budget would be sent to the Prime Ministry, he added. 

Budget deficit below forecasts

Turkey’s budget deficit was 4.5 billion liras in the first nine months of this year below forecasts while it was 14.4 billion in the same period of last year, Şimşek revealed. The budget expenses rose to 294.5 billion liras with a 14.1 percent in the same period as budget incomes also rose to 290 billion liras with a 19 percent increase. 

The budget deficit is expected to be 19.4 billion liras, corresponding to 1.2 percent of GDP, by the end of this year, which is a better performance than forecasted, he said, adding that he didn’t foresee any risks to the growth rate from inside. Şimşek stated that these figures showed that the government paid attention to budget discipline and had the necessary will for it. 

Şimşek noted that they would maintain their achievements in public finance during the following year. “The public savings-GDP ratio rose by 8 points in the last 11 years and we hope to raise it. Rising public savings will contribute to reducing the current account deficit that is a structural problem,” he said. 

The minister also said in order to discipline current expenses they would manage the rise in public staff numbers. “We won’t hire numerous staff to the public [institutions]. We will remove 50 percent of contingent rule in the 2014 budget code,” he said, adding that a total of 74,000 persons would be hired to the public institutions in 2014. 

Meanwhile, Şimşek said, “We have not drafted an election budget for next year, just as we did not in the past. We are not seeking an election economy.” 

Turkey’s government would not overspend next year in the run-up to a series of elections, Şimşek promised.

The International Monetary Fund last week called on Turkey to tighten its monetary and fiscal policies in order to reduce its external imbalances, which have been exacerbated by capital outflows from emerging markets.

Turkey is due to hold local and presidential elections next year and a parliamentary vote in 2015. Some economists fear the government, which has built its reputation on a decade of strong growth, may be tempted to pump prime the economy.

In its mid-term economic program this week, the government reduced the growth rate target from 4 percent to 3.6 percent for this year and from 5 percent to 4 percent for 2014. They prioritized reducing the current account deficit and inflation and increasing growth and employment.