July Budget Results and Program-Defined Balance Evaluation

Once things settle down, if we look a little more closely at the end-July budget results in terms of policy direction and future risks (2): The deterioration in the program-defined budget balance is accelerating, also under the impact of the war (https://tepav.org.tr/tr/haberler/s/11279)

• The program-defined balance is 50% lower compared to the same period last year. -However, what is quite striking is that when adjusted for the SGK state contribution payment, the program-defined balance turns into a deficit. The program-defined balance is a balance from which budget items that are not dependent on budget performance and in some cases have a one-off impact—such as interest (both revenue and expenditure), privatization proceeds, paid military service revenue, SOE (KİT) and central bank profit transfers—are excluded. It is important in terms of borrowing dynamics. (https://tepav.org.tr/tr/yayin/s/114) Turkey measured its budget performance using the program-defined balance during the 2000s when implementing IMF-supported programs.