ANKARA - Bloomberg
Turkey reported a budget surplus, excluding interest payments on debt, of YTL 5.1 billion ($4.2 billion) in June, boosted by sales of government assets, the Finance Ministry said yesterday.
The so-called primary balance had a surplus of YTL 697 million in June 2007, the ministry in Ankara said in an e-mailed statement. The overall budget posted a surplus of YTL 4 billion in the month, compared with a deficit of YTL 2.5 billion the previous June.
Income from state asset sales helped the primary surplus rise six-fold from a year earlier. The government in May announced looser budget goals to allow spending on dams and irrigation in the southeast of the country. An International Monetary Fund loan accord expired the same month.
�They brought in a lot of privatization revenue that month, which makes the performance look stronger,� said Şengül Dağdeviren, chief economist for ING Bank Turkey, the local unit of ING Groep NV, in Istanbul. �It won't be sustained at those levels.�
Budget revenue rose 27 percent in June from the same month last year. Non-tax income jumped 80 percent to 5.5 billion.
A leading Turkish petroleum distributor Turcas and Azerbaijan's Socar on May 30 took control of state-run chemicals maker Petkim after paying $1.66 billion of the $2.04 billion they bid last year for 51 percent of the company. British American Tobacco paid $1.72 billion June 24 to buy cigarette maker Tekel from the government.
Budget spending fell 15 percent in June from the same month last year to YTL 14.6 billion. Turkey held parliamentary elections in July last year and the government accelerated spending on water pipes and roads ahead of the polling.
The overall budget produced a surplus of YTL 1.9 billion in the first six months of the year, compared with a full-year goal of a deficit of 18 billion liras, the ministry said yesterday. The six-month primary surplus was YTL 22.7 billion, compared with a year-end goal of YTL 38 billion.
Current-account gap widens
On the other hand, the country's current-account deficit widened in May for the 12th consecutive month as energy prices rose and imports of raw materials for manufacturing hit a record. The deficit expanded to $4.6 billion from $3.6 billion in May 2007, the Central Bank in Ankara said Wednesday. The current-account gap in the 12 months through May was a record $43.1 billion, the Bank added. The deficit in 2007 was $37.5 billion, or about 5.7 percent of gross domestic product. Rising energy prices are pushing up the import bill, while the global credit crunch cuts the foreign investment Turkey needs to finance its trade deficit. The current account gap is likely to reach $50 billion by the end of the year and the financing situation is �worrying,� Moody's Investors Service said in a statement.
Turkey imports nearly all of its energy and crude oil prices were about $130 a barrel in May compared with about $66 a year earlier. Imports of fuels and mineral oils rose to $4.6 billion in May from $2.7 billion in the same month of 2007, Turkish Statistical Institute, or TÜİK said June 30. �There are some positives here such as tourism revenue, but the financing picture is what matters,� said Aslı Savranoğlu, an economist for EFG Istanbul Securities. �And things there are not going as we'd like them.� Tourism revenue in the first five months was $5.3 billion, compared with $4.4 billion in the same period of last year. Net borrowing by Turkish companies, excluding banks, rose 22 percent in the first five months to $13.5 billion, the Bank said. That increase is helping to offset a decline in foreign direct investment. The country drew in $6.1 billion in the first five months of the year, compared with $11.1 billion in the same period of 2007.