Bloomberg News

Turkey Budget Surplus Rises to 1.7 Billion Liras in January

February 15, 2012

(Updates with minister’s comments in the fifth paragraph, analyst comments in seventh.)

Feb. 15 (Bloomberg) -- Turkey’s budget surplus grew 73 percent to 1.7 billion liras ($970 million) in January from a year ago, Finance Minister Mehmet Simsek said.

The surplus increased from 1 billion liras a year ago, Simsek said at a news conference in Ankara today.

The so-called primary surplus, which excludes interest payments on debt, expanded to 7.1 billion liras last month from 4.8 billion liras in January 2011, he said.

Yields on two-year benchmark bonds rose 2 basis points, or 0.02 percentage point, to 9.30 percent at 14:17 p.m. in Istanbul. The lira rose 0.5 percent to 1.7601 per dollar.

The government plans to maintain the positive budget performance that will allow it to reduce interest expenditures and allocate more funds to areas where it’s needed, Simsek said.

Income rose 20 percent to 28.1 billion liras, outpacing a 17 percent gain in expenditure, according to data posted on the Finance Ministry’s website. Tax revenue made up 84 percent of total revenue in January. Interest spending surged 42 percent to 5.39 billion liras, the ministry said.

“If economic growth slows as expected, the budget performance may be affected negatively, as taxes make up a majority of the revenues,” Murat Yardimci, head of trading at ING Bank AS in Istanbul, said in e-mailed comments. The Turkish economy is expected to grow 3.4 percent this year, according to a central bank survey of economists and business leaders, published Feb. 8. Growth was 9.6 percent in the first nine months of 2011.

--With assistance from Selcuk Gokoluk in Istanbul. Editors: Leon Mangasarian, Andrew Atkinson.

To contact the reporter on this story: Ali Berat Meric in Ankara at americ@bloomberg.net

To contact the editor responsible for this story: Mark Bentley at mbentley3@bloomberg.net


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