Turkey aims to decrease the central government's budget deficit-to-gross domestic product (GDP) ratio gradually until 2022, according to the country's medium-term fiscal plan.

The country aims to keep the ratio at 2.9% during the next two years and drop to 2.6% in 2022, the plan, issued in the Official Gazette, revealed on Friday.

The plan expects the central government's budget deficit to be TL 138.87 billion for 2020, TL 157.6 billion for 2021 and TL 160.15 billion for 2022. Last year, Turkey's central government budget balance showed a deficit of TL 72.6 billion, while the deficit was TL 68.1 billion in the first 8 months of 2019.

Budget expenditures are also forecast to reach TL 1.08 trillion in 2020, TL 1.19 trillion in 2021 and TL 1.29 trillion in 2022. The government announced previously that the year-end budget balance target was TL 80.6 billion, with TL 880.4 billion revenue and TL 960.97 billion expenses for 2019.

SINGLE-DIGIT INFLATION

The plan predicted 5% GDP growth rate for the next three years – TL 4.87 trillion for 2020, TL 5.48 trillion for 2021 and TL 6.07 trillion for 2022. The Turkish economy increased by 2.6% last year and 7.4% in 2017, while it is expected to grow between 0.1% and 1% in 2019 by several institutions. The end year consumer price index – also known as the inflation rate – is expected to stand at 8.5% in 2020, 6% in 2021 and 4.9% in 2022.

According to the Central Bank of the Republic of Turkey (CBRT) survey, year-end inflation is expected to reach 13.96% in 2019.

REVENUE PERFORMANCE

The fiscal policies' main goal is to continue fiscal discipline tenaciously, the plan said.

"In this context, efficient use of resources will be ensured and structural changes for providing savings will be implemented in designated areas," it added. The plan also aims to create permanent resources to raise the budget's revenue performance, and reduce the underground economy. The plan promises transparency, accountability, productive resource usage, tax equity and support for education, investment and agriculture. Public investments will reduce differences between regions' development levels across the country, the plan underlined.

The plan was prepared by the Treasury and Finance Ministry, and the Strategy and Budget Presidency.