Erdogan’s imperialistic wars lead to 47% surge in expenses and to -10% Turkish deficit in April

An unexpected surge in expenses of the Turkish state resulted in a huge hole in the country’s public finance.

The Turkish Treasury cash balance this April, posted a deficit of 46.2 billion Turkish liras, the Treasury and Finance Ministry said on May 8. This is -1% of GDP, and it an equivalent to -$6.6 billion.

Cash revenues of the Treasury totaled 65.8 billion Turkish liras ($9.4 billion) last month, up 6.8% from April 2019, which is well below the current 11,8% inflation, denoting a drop of real GDP by -4.5%

At the same time, there was a surge in public expenditures to 112.8 billion liras ($16.2 billion), posting an epic leap of 47%.

This huge increase in expenditures included interest payments of around 16.5 billion liras ($2.4 billion), while non-interest expenditures amounted to 96.3 billion liras ($13.8 billion), driving a 30.5 billion liras ($4.4 billion) deficit in the primary balance.

There were some small revenues (765 million liras ) from the privatization or fund income in April — including transfers by the Turkish Privatization Administration, 4.5G license payments and land sale revenues.

It is largerly believed,  that the surge of expenses relates to the involvement of Turkish army to imperialistic wars, in Syria and Libya, coupled by an effect from coronavirus crisis.

However, these problems, when combined with the lack of foreign currency funds to cover the needs of Turkish state and the needs of major Turkish state banks(click here), indicates that Turkey may soon be on its way to serious financial problems, and perhaps to bankruptcy.

new-economy.gr