Türkiye’s budget registered a record deficit in February, official data showed Wednesday, driven mainly by a fall in tax income, showing the impact of catastrophic earthquakes that devastated the country's southeast last month.
The central government budget posted a shortfall of TL 170.56 billion ($8.99 billion) in February, the Treasury and Finance Ministry said. It compared with a surplus of TL 69.7 billion a year earlier and TL 32.2 billion in January.
It's February reading marks the third consecutive monthly deficit and the largest in the data going back to 2006.
The primary balance, which excludes interest payments, logged a deficit of TL 136.34 billion, the Treasury and Finance Ministry said.
Budget revenues were at TL 218.8 billion, while expenditures amounted to TL 389.4 billion, the data showed. Tax revenues reached 179.6 billion. Non-interest expenditures stood at TL 355.2 billion, while interest payments were at TL 34.2 billion, the ministry said.
The government implemented bumper measures to minimize the Feb. 6 earthquakes' impact on the economy, such as delaying debt payments and offering wages and support money to the earthquake victims.
"Since the change in payment plans caused some tax payments to be postponed from February to March, the increase in the budget deficit in this period was mainly due to the decrease in corporate tax revenues," said Enver Erkan, chief economist at Dinamik Yatırım.
"We anticipate that budget expenditures will increase in H1 due to the impact of the earthquake disaster in February on the economy and the growth incentives before the election. This means that the budget will come under more pressure in the coming months."
Economists and business groups predict that last month's earthquakes, which killed more than 48,000 people in Türkiye, will lead to rebuilding costs of some $100 billion and will shave one to two percentage points off the economic growth this year.
In total, the budget recorded a deficit of TL 202.8 billion in the January-February period, while the primary deficit stood at TL 147.2 billion, data showed. According to current numbers, the budget deficit has already filled 30.8% of the total expected deficit this year.
Budget revenues totaled TL 507.9 billion, while expenditures stood at TL 710 billion, the data showed.
Last September, Ankara forecast a budget deficit of 3.5% of the country's gross domestic product (GDP) this year. Although the budget deficit has widened in recent years, it stood at around 1% of GDP in 2022.
Economists reckon government spending on rebuilding and aid efforts could lift the budget deficit to GDP ratio above 5% this year.
The Treasury transferred TL 5.6 billion for the transformation costs of disaster-prone areas and handed out some TL 17.7 billion to families and businesses in February, according to budget data.
It also showed TL 16 billion transfer to state energy company BOTAŞ in February, bringing the total this year to TL 32 billion.
