Türkiye’s budget balance registered a TL 48.6 billion (around $1.8 billion) surplus in July, official data showed Tuesday, after the government unveiled tax hikes on an array of goods to boost income.
It followed a nearly TL 220 billion deficit in June, seven times the deficit a year earlier. The government has instructed institutions to review their expenditures.
Türkiye last month raised taxes on petrol and hiked value-added taxes (VAT) as part of moves to boost revenues after the sharp rise in spending related to the devastating earthquakes in February and May presidential and parliamentary elections.
Revenues in July rose 156% year-over-year to TL 504.4 billion, the Treasury and Finance Ministry data showed. Expenditures jumped 74.7% to TL 455.8 billion.
The primary surplus, which excludes interest payments, amounted to TL 86.3 billion, according to the ministry.
In the first seven months of the year, the budget deficit amounted to TL 435 billion.
Treasury and Finance Minister Mehmet Şimşek has pledged to enhance and rationalize public expenditure. A circular he signed had been sent to all state institutions last month reminding them of the need to make savings, reduce bureaucracy and use resources effectively.
Parliament has also approved an extra budget of TL 1.12 trillion for this year, which followed various other recent tax increases among efforts to bolster government coffers, including a two percentage point increase to value-added tax and a five percentage point hike to corporate tax.
While aimed at tackling the budget deficit, the tax hikes are seen as stoking inflation, which eased to as low as 38.21% in June but rose again to nearly 48% last month.
Officials have acknowledged it would rise further with the impact from tax hikes also expected to be felt in August. Inflation had leaped to a 25-year high above 85% last October.
