Turkey targets to decrease the central government’s budget deficit-to-gross domestic product ratio gradually until 2022, according to the country’s medium-term fiscal plan.
The country aims to keep the ratio at 2.9% during the next two years and drop to 2.6% in 2022, the plan, issued on the Official Gazette, revealed on Friday.
The plan expects the central government’s budget deficit of 138.87 billion Turkish liras ($23.8 billion) for 2020, 157.6 billion liras ($27 billion) for 2021 and 160.15 billion liras ($27.44 billion) for 2022.
Last year, Turkey’s central government budget balance showed a deficit of 72.6 billion Turkish liras ($14.8 billion), while the deficit was 68.1 billion Turkish liras ($12 billion) the first 8 months of 2019.
Budget expenditures are also forecast to reach 1.08 trillion liras ($180 billion) in 2020, 1.19 trillion liras ($200 billion) in 2021 and 1.29 trillion ($220 billion) in 2022.
The government announced previously that the year-end budget balance target was 80.6 billion Turkish liras ($13.3 billion), with 880.4 billion Turkish liras ($145.5 billion) revenue, and 960.97 billion Turkish liras ($158.8 billion) expenses for 2019.
Single-digit inflation targets
The plan predicted 5% GDP growth rate for the next three years — 4.87 trillion liras ($830 billion) for 2020, 5.48 trillion liras ($940 billion) for 2021 and 6.07 trillion liras ($1.04 trillion) for 2022.
Turkish economy increased by 2.6% last year and 7.4% in 2017, while it is expected to grow between 0.1% to 1% in 2019 by several institutions.
The end year consumer prices index — also known as the inflation rate — is expected to stand at 8.5% in 2020, 6% in 2021 and 4.9% in 2022.
According to a Central Bank survey, the year-end inflation to reach 13.96% in 2019.
Permanent resources to raise revenue performance
Fiscal policies main goal is to continue fiscal discipline pertinaciously, the plan said.
“In this context, efficient use of resources will be ensured and structural changes for providing savings will be implemented in designated areas,” it added.
The plan also aims to create permanent resources to raise the budget’s revenue performance, and reduce the underground economy.
The plan promises transparency, accountability, productive resource usage, tax equity, supports for education, investments and agriculture.
Public investments will reduce differences between regions’ development level over the country, the plan underlined.
The plan was prepared by the Treasury and Finance Ministry, and the Strategy and Budget Presidency.
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