(Bloomberg) — Turkey posted its largest monthly budget surplus on record as the government moves to repair public finances to complement monetary policy aimed at curbing inflation.
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The central budget balance showed a surplus of 219 billion lire ($6.7 billion) in May, the largest in data going back to 2006. It was a sharp turnaround from five straight months of deficits, according to figures published by the Ministry of Finance and Finance. Thursday.
The Turkish government is on track for tighter fiscal policy with recent measures including budget cuts, but also a wide range of new plans, such as the introduction of a minimum tax on companies.
The proposals – aimed at generating additional revenue estimated at $7 billion – will be discussed by lawmakers and are likely to be ratified as President Recep Tayyip Erdogan’s ruling AK Party and its allies control a parliamentary majority.
Personnel spending and income transfers – which include social support to households – were offset by a sharp increase in tax revenues, which accounted for the bulk of government revenues last month.
Although the latest figures show a sharp improvement, the budget remains deeply in the red so far this year, on track for a deficit that is likely to be among the largest of Erdogan’s two decades in power.
The deficit in the first five months stands at 472 billion liras, while the government’s forecast puts the total deficit this year at 2.7 trillion liras or 6.4% of gross domestic product.
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