(Adds details, background, economist quote)
ISTANBUL, March 15 (Reuters) - Turkey's central government
budget recorded a deficit of 170.56 billion lira ($8.99 billion)
in February, the Finance Ministry said on Wednesday, showing the
impact of massive earthquakes that devastated the country's
southeast last month.
The primary balance, which excludes interest payments,
logged a deficit of 136.34 billion lira, it said.
Even before the earthquake, President Tayyip Erdogan was
facing major economic challenges with soaring inflation eating
away at his popularity and the quake has added to his
difficulties ahead of presidential and parliamentary elections
scheduled for May 14.
The government implemented bumper measures to minimize the
earthquake's impact on 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 Yatirim.
"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 the Feb. 6
earthquake, which killed more than 48,000 people in Turkey, 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 202.8 billion
lira in Jan-Feb period while primary deficit stood at 147.2
billion lira, data showed. According to current numbers, the
budget deficit has already filled 30.8% of total expected
deficit this year.
Last September, Ankara forecast a budget deficit of 3.5% of
the country's gross domestic product (GDP) this year. Although
budget deficit has widened in recent years, it stood 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 5.6 billion lira for the
transformation costs of disaster-prone areas and handed out some
17.7 billion lira to families and businesses in February,
according to budget data.
It also showed 16 billion lira transfer to state energy
company BOTAS in February bringing the total this year to 32
billion lira.
($1 = 18.9824 liras)
(Reporting by Nevzat Devranoglu and Can Sezer; Editing by Ali
Kucukgocmen and Christina Fincher)
Messaging: ezgi.erkoyun.thomsonreuters.com@reuters.net;))
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