Turkish primary surplus exceeds expectations

ANKARA – Turkey’s budget primary surplus, a key indicator in its $19 billion IMF loan deal, comfortably exceeded the government’s nominal target for the whole of 2004 in the first nine months of the year, data showed yesterday. Analysts said the primary surplus, which excludes interest payments on its heavy domestic debt load, showed Turkey was on track to meeting key International Monetary Fund targets. An IMF team is currently in Ankara for talks on a new standby loan facility. The primary surplus was 24,095 trillion lira ($16.12 billion) in the January-September period, compared to a full-year 2004 budget target of 20,214 trillion, the Finance Ministry said in a statement. The budget deficit was 21,080 trillion lira in the January-September period. In September alone, the primary surplus was 1,527 trillion lira, while the deficit was 3,079 trillion lira. A Reuters survey of 10 banks had forecast a median 1,000 trillion lira for the September primary surplus. Turkey has agreed to an annual budget primary surplus target of 5 percent of gross national product under its IMF agreement, and a total public sector primary surplus of 6.5 percent of GNP. The public sector measure includes the finances of state enterprises. «Turkey will manage a 5 percent primary surplus target for the consolidated budget, although tax receipts are slightly lower (in September) than in August,» said West LB’s Sevin Ekinci. She added that the financial markets would react positively to the budget data. Turkey will not exceed its 6.5 percent primary surplus target for the public sector despite earlier expectations based on strong economic growth, Disbank chief economist Haluk Burumcekci said. «It seems difficult to beat the 6.5 percent target despite a strong economic performance because growth is very fast,» he said. Turkish GNP grew by 14.4 percent in the second quarter year-on-year and by 12.4 percent in the first quarter.