The cash budget registered a deficit of TL 4.5 billion in February, which was lower than the deficit of TL 8.7 billion in the same month last year. Interest expense was slightly lower than the previous year at TL 11.4 billion, while the primary balance surplus was TL 7.9 billion, which was higher than TL 4.1 billion in past year. Furthermore, approximately TL 23 billion of the taxes accumulated in February this year were entered into the Treasury accounts in March, indicating that the budget performance improved significantly in March.
Despite this, total revenues increased 12.3% year-on-year, possibly supported by the relatively strong outlook for domestic demand and the restructuring of public accounts receivable.
The 8.6% lower increase in non-financial expenses compared to last year also supported the positive outlook in the budget. Thus, the relationship between the 12-month budget deficit and GDP was 4.4%, 0.1 points less than the previous month. In the coming months, this proportion will decline rapidly with the base effect of last year’s pandemic and the transfer of CBRT earnings. However, we continue to forecast that the budget deficit for the full year will be 4.5% of GDP for the full year, driven by low windfall income and rising interest expenses.
QNB Finansbank Research
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