Turkey Records a Budget Deficit of $6.8 Billion in April

Turkish 5-lira banknotes

The Turkish Ministry of Treasury and Finance announced on Monday that the state's general budget recorded a deficit of 132.5 billion Turkish lira ($6.8 billion) in April compared to 47.22 billion Turkish lira in March. The accumulated deficit for 2023 has so far reached 382.5 billion Turkish lira, primarily due to the destructive earthquakes that hit cities in southeastern Anatolia on February 6th.

Official figures showed that budget revenues reached 268 billion Turkish lira in the same month, while expenses were 400 billion Turkish lira in March. The gap widened sharply after the earthquakes, which killed more than 50,000 people and destroyed hundreds of thousands of buildings and infrastructure in 11 cities. The budget deficit was 170.56 billion Turkish lira in January and February, with the cumulative figure for the first two months of the year being 202.8 billion Turkish lira. The government implemented substantial measures to mitigate the earthquake's impact on the economy, such as delaying debt repayment, wage advances, and financial support for earthquake victims, which also contributed to the deficit increase.

Economic Cost of February Earthquakes: $100 Billion

Economists believe that government spending on reconstruction and aid efforts could raise the budget deficit to more than 5% of GDP this year, up from Ankara's estimates last September of 3.5% and which was around 1% in 2022, despite its expansion in recent years. The economic cost of the earthquakes is estimated at more than $100 billion and is expected to cut one to two percentage points off economic growth this year. Data showed that non-interest expenditures in April were 365.9 billion Turkish lira, while interest payments were 34.5 billion Turkish lira. The primary balance, which does not include interest payments, recorded a deficit of 98 billion Turkish lira, while tax revenues were 232.7 billion Turkish lira. The dollar was traded at an average of 19.3478 lira in April. The same rate stabilized at an average of 18.9382 in the first four months from January to April, and overall, budget revenues during the same period were 1.1 trillion Turkish lira, while expenditures were 1.4 trillion Turkish lira.