ANKARA- TEPAV has calculated the approximate cost of the latest policy decisions to be around 8.2 billion YTL for this year; and declared that the positive developments observed in the budget during the initial five months of the year will not be able to continue in the upcoming period.
Economic Policy Research Foundation of Turkey (TEPAV) Stability Institute has published the Fiscal Monitoring Report - Budget Results of May 2008. The report reiterates that the approximate cost of the latest policy decisions for the years 2008-2012 will be 44.4 billion YTL, and states that 8.2 billion YTL of this amount belongs to this year. 2.9 billion YTL of this amount comes from the Housing Benefit, 2.3 billion YTL from GAP and other investments, 0.2 billion YTL from the partial abandonment of the claims of university circulating capitals from the government, 2.2 billion YTL from the revenue share increases of local administrations, 0.1 billion YTL from the reduction of the amount of deduction from the resource to be transferred from 25 per cent to 20 per cent for one year, and 0.6 billion YTL from the resource transfer from the Unemployment Fund within the scope of the employment package.
The improvement in the budget may not continue
TEPAV Report also emphasizes that the central government budget deficit as of end of May declined to 2.1 billion YTL by 38.4 % decrease as compared to the same period last year. The report notes that the budget balance as a whole has been secured thanks to interest rates at the expenditure side, and thanks mostly to direct taxes at the revenue side as compared to last year; and estimates that this view is to be affected mostly by upward risk factors at the expenditure side and by downward risk factors at the revenue side during the remaining half of the year; and continues as follows:
"- We are of the opinion that the relative positive development observed in the budget so far will not be able to continue since debt service is delayed to the second half of the year;
- Since recession symptoms have tended to increase in the second and third quarter of the year, unlike the first quarter, and since its negative effects on tax performance has started to become evident;
- And since the use of current and investment expenditure appropriations, and mostly of goods and services procurement expenditures, has gained speed.
- Therefore we believe that it is necessary to take into consideration the cost of the latest policy decisions."