Fiscal measures boost economy growth: Turkey
18 Jul 2017 - 1:19
Ankara: Turkey’s budget deficit surged in June as fiscal measures to boost the economy fuelled spending, but the stimulus was expected to help lift economic growth above forecasts this year, Finance Minister Naci Agbal (pictured) said yesterday.
He pointed to data on Monday showing the unemployment rate falling for a third consecutive month after hitting a seven-year peak of 13 percent at the start of the year as a sign that measures to lift economic activity were bearing fruit.
Turkey was shaken on July 15, 2016 by an attempted coup which led to a 1.3-percent economic contraction in the third quarter. Gross domestic product rebounded to grow 5 percent in the first quarter after a government spending rise.
“The positive economic indicators show that the wheels of the economy are turning normally and that July 15 did not cause lasting damage to the economy,” Agbal told a news conference to announce the budget data.
Those figures showed the impact of fiscal stimulus, with the budget deficit surging to 13.7bn lira in June and 25.2bn lira in the first half.
A month earlier ,the budget showed a surplus of 6.4bn lira. There was a deficit of 7.9bn lira in June 2016.Agbal said the fiscal measures had generated costs to the 2017 budget amounting to 11.9bn lira and those costs would ease to 7.4bn lira in 2018 and 6.9bn lira in 2019.
The budget deficit was as a result expected to exceed full-year official forecasts, he added. According to the government’s medium-term programme announced last October, the budget was expected to show a deficit of 46.9bn lira this year.
That programme also envisaged GDP growth of 4.4 percent this year and Agbal said growth would exceed that level, while consumer price inflation was seen in single digits at year-end, having hit a near 9-year peak of 11.9 percent in April. Agbal said recent economic data had been encouraging.
The unemployment rate dropped to 10.5 percent in the March-May period, falling further from a seven-year high at the start of the year, data from the statistics institute showed yesterday.
However, the jobless rate was still well above a level of 9.5 percent a year earlier with the youth unemployment still near 20 percent.