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TEPAV: "IMF Performance Criteria will not be Met"
27/10/2007 - Viewed 1775 times
ANKARA - TEPAV, declared that performance criteria has not been met as of end of April and they will not be met as of end of August either.
The Fiscal Monitoring Report, prepared by Economic Policy Research Foundation of Turkey (TEPAV) Economic Stability Institute - 2007 July-August Budget Results has been published. In addition to budget results, the report also included a section titled "IMF Performance Criteria and Consolidated Public Balance: Will the Year End Target be Achieved?" In this section, it is pointed out that performance criteria about the consolidated public sector primary balance performance which was enclosed in the annex to the letter of intent given to the IMF in May 2007 have not been met and there has been a 24% deviation (38% when SEE's are excluded) from the target. The report continued:
"As a matter of fact, this has been pointed out as negligence and it has been expressed that precautions would be taken. Nevertheless, the prediction of deviation has been realized but the precautions turned out to be of minor importance which was insufficient to reverse the predictions. Another adverse point in the letter of intent given to the IMF is the performance criteria set for month end August. We predict that, similarly, the performance criteria for August will not be able to be met, primarily due to the degradation in budget performance.
Consolidated public sector primary balance figure decreased to 60%, whereas this figure had been about 86% in the same period last year. Thus, we think that the risk of not meeting the target figures agreed upon with the IMF stand by arrangement in the rest of the year is rapidly increasing and continuation of the program until May 2008 can only be possible if very serious expenditure and revenue measures were taken."
In the report, it is pointed out that the improvement SEE's which is predicted to be 126% and improvement of the non budget funds' balance from a deficit of 1,7 billion YTL to a surplus of 1,1 billion YTL is interesting and "Detailed disclosure of consolidated and corrected revenue and expenditure figures of these two institutional structures by the relevant authorities to the public in addition to the IMF is necessary for a better monitoring of the course of consolidated public sector general balance."
"Expenditures of 3 billion YTL are without allocations"
TEPAV's report also included a section titled "The Court of Accounts' General Concordance Notice and Treasury Transactions Report: Findings and Evaluation of the Auditing Format". The report in which it is stated that "expenditures of about 3 billion YTL were made without the allocations, that is, the authority given by the Assembly has been breached in expenditure.", continued "The Court of Accounts just confirms extra allocation expenditures while leaving the discretion to the Assembly in this matter prevents mechanisms of accountability from being used properly." In the report, the following evaluations concerning the Treasury Transactions Report of the Court of Accounts have been made:
" 1. Although we agree with the findings of the Court of Accounts on the extent of budget deficit we think it is insufficient.
2. The Court of Account has made rightful but late identifications with respect to deficiencies in the accounting and tracking system of some payables and receivables of the Treasury.
3. It is not appropriate for the Court of Accounts to make debt analyses or similar evaluations in the Treasury Transactions Report, with respect to format and quality." "The budget had a cumulative deficit of 8.4 billion YTL"
In the report, it is expressed that together with the results of July, which were disclosed with a delay, the Central Government Budget had a cumulative deficit of 8.4 billion YTL by the end of August. The report continued "After the corrections for local government and fund shares have been made, the budget deficit turns out to be 9.3 billion YTL. Considering that the budget had had a surplus of 474 million YTL by the end of last year, the budget performance is observed to continue its degradation increasingly."
It is also stated in the report that The Ministry of Finance has significantly revised the year end target for budget deficit from 16.8 billion YTL to 8.5 billion YTL in the report titled "2007 Central Government Budget Realizations and Expectations Report" which it published in July and it is pointed out that this figure has been reached by August. "SEE is in a more serious degradation …" The report included the following expressions: "While the we have derived our predictions in the table above from the data trends observed in previous periods, both news covered in media during the course of the publishing of our report and the press statement of the Treasury made it clear that, in accordance with our predictions, 2007 IMF performance criteria will not be met (a realization of 4.3% instead of a 6.5%). Moreover, developments points to the fact that especially SEE balance is in a more serious degradation because of energy costs. We will provide a detailed evaluation of the 2007-2008 budget predictions of the public authority in our September report."


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