Gov’t forecasts 12 pct spending growth in 2009
Posted by meb at October 22nd, 2008
Turkey plans to increase government spending by 12 percent to almost YTL 262 billion ($175 billion) in 2009, under a draft budget submitted to the Ankara parliament over the weekend, a Finance Ministry official said.
The government also expects to raise YTL 202 billion in taxes in 2009, 16 percent more than this year, according to the official, who spoke on condition of anonymity. Rising prices are driving up public spending. Inflation will probably end 2008 at 10.4 percent, a regular Central Bank survey of businessmen and economists published Oct. 9 showed.
A team from the International Monetary Fund is in Ankara this week, inspecting progress since a $10 billion loan accord expired in May. Turkey still owes the fund about $9 billion, or five times the quota of borrowing it would normally be allowed. Until it pays off more of that debt, fund teams will continue to hold inspection tours.
“This is the first budget in nearly 10 years that has not been drawn up under IMF supervision and it’s for a year when growth is likely to be slow,” said Levent Durusoy, chief economist for Yatırım Finansman Securities in Istanbul, who forecasts growth will slow to 3 percent this year and ease further in 2009. “It’s important that the goals are realistic and achievable.”
The 2009 budget sees total revenue of YTL 248 billion and a deficit of YTL 14 billion, equivalent to about 1.3 percent of the government’s estimate for 2009 gross domestic product.
The draft is based on a forecast of 4 percent growth in 2009, down from the 5 percent originally forecast in the medium- term fiscal plan.
The economy will probably expand 3 percent this year and 1.7 percent in 2009, Goldman Sachs Group Inc. said Oct. 17, lowering forecasts from 3.1 percent for 2008 and 3 percent for 2009. Turmoil on global credit markets and slowing growth in western Europe will curb economic expansion in emerging markets, the report said.
Turkey’s economy grew 1.9 percent in the second quarter of the year, the slowest annual expansion since the country emerged from a 2001 recession.
Parliamentary commissions will debate the budget in November before the main assembly votes on it. The plans may change during discussion.
source: Turkish Daily News
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