Turkey's deficit at lowest level in 30 years

Turkey nearly balanced its budget last year, with a deficit of only YTL 3.9 billion ($2.9 billion), the lowest in the last 30 years, said PM Recep T.Erdoðan as he released year-end figures at a press conference in Ankara.

Turkey's deficit at lowest level in 30 years

Expenditures were YTL 175.3 billion, in which interest payments totaled around YTL 45.9 billion. Revenues, however, reached YTL 171.3 billion. Of total revenue, YTL 137.5 billion was received from taxes. The deficit was YTL 3.9 billion and the primary surplus was YTL 41.9 billion. "Our deficit target was YTL 13.9 billion for 2006, but we went under the this target. We thought we should be very careful on this issue, so that it won't overshadow our success, and, thanks to Allah, we achieved it," said Erdoðan. He said the year-end results were a source of pride for the government.Erdoðan said that since the Justice and Development Party (AK Party) came to power, they had set three major targets: attaining price stability, achieving sustainable growth and increasing Turkish companies' competitive power.

To reach these targets, Erdoðan said they had adhered closely to tight fiscal policies. Financial discipline meant not only reducing expenditures or increasing revenue but also harmony between income and expenditures policies, Erdoðan said. "This is something that no other government before us managed to achieve. One of the major reasons for the economic crises of 1994, 2000 and 2001 was the lack of adherence to financial discipline," Erdoðan added.
Erdoðan also provided figures on 2002, when the AK Party started ruling the country. The budget deficit over GDP was 14.6 percent in 2002, while the share of interest payments was 18.8 percent. The net debt stock of the public sector over GDP was 78.4 percent. As of the end of 2006, the budget deficit over GDP, however, decreased to 0.7 percent. "Such a low level of budget deficits was last seen in 1976," emphasized Erdoðan.
"There were only 6,101 kilometers of highway when we took power, and we increased it to 13,000 kilometers in four years. Our new target is to leave no village without water or electricity," said Erdoðan. Adding that they had brought potable water to 11,706 villages under a project known as KÖYDES , Erdoðan said: "We are proud of these achievements because this is what being a social state requires. This is the struggle against regional inequities. We are preparing groundwork for a return to the villages."
Erdoðan also said the 2007 budget was the fifth AK Party government budget. "For the first time in the republic's history, a government has been able to complete its fifth consecutive budget. This is the biggest indicator of the stability this country has gained."
As a result of the decline in the deficit, Turkey had gained a lot of important benefits, he said. "As the biggest priority, we were able to spare more resources for education and health services. During our term, we built 102,272 new classrooms for our children. We managed to increase the amount allocated to investment. While the share of agricultural subsidies in the budget was only 1.7 percent in 2002, this ratio was raised to 2.7 percent in 2006."

Target: $10,000 per capita income by 2013
The prime minister said countries that do not have a strong fiscal structure are not respected in the international arena and that Turkey's budget performance after 2003 was inapproachably positive ?????. "Here I am talking about the budget. It demonstrates the success of our economic program, but our main goal is to increase the wealth of our nation," Erdoðan said. He emphasized that they had initially wanted to increase per capita income to $5,000 and had achieved it in the fourth year of their administration. "Now our target is to increase it to $10,000 by 2013," said Erdoðan. The prime minister said they would fulfill all the citizens' wishes and dreams by preserving economic stability.
Upon a question on the presidential election's effect on the economy, Erdoðan underlined the importance of the media's attitude. "Actors always change, but Turkey belongs to all of us. When the actors change, we should help the actors to achieve better conditions; if they cannot manage it, then we have the right to warn them appropriately. This is what democracy calls for."
Erdoðan said he believed the elections process would set an example to the world about the power of democracy in Turkey. When asked about the effects of agreements with the World Bank, Erdoðan said that agreements with the bank would not be a determining factor for the government. He pointed out that it was the government that decided to offer a 25 percent stake of Halkbank to the public. "There may be different views about our decision on this issue, but the government has a political mandate to which everyone should show respect."
The prime minister noted that Turkey's social security institution deficit was YTL 23.5 billion. When asked whether there would be a tax cut in 2007, Erdoðan said, "We are making plans to reduce taxes; we will announce it later on." Erdoðan also added that Turkey was in a good situation vis-a-vis its primary surplus.
Erdoðan mentioned that he did not foresee any economic risks that would emerge from this year's elections. "But we cannot say there is no risk to the economy. No one can say this. There is always a risk, but we also have precautions," said the prime minister. He reminded members of the press that the price of oil had increased to $70 from $20-$22 in May and June of last year. He said that fluctuation had caused many problems in unprepared countries but noted that Turkey had not faced that kind of problem because of its strong economic structure. Erdoðan acknowledged that there had been a failure in inflation targeting for 2006. "My expectation is that there will be improvements by April [2007]," said the prime minister. He said that Turkey's debt to the International Monetary Fund (IMF) was $10.7 billion and their goal for 2007 was to reduce it to $6.6 billion.

 

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Güncelleme Tarihi: 20 Eylül 2018, 18:16
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