Turkish economy: the 2022 budget deficit

Mehmet Ali Akben, head of Turkey’s economy and BDDK banking supervisor, said on Monday that the government is addressing the sector’s request for dividend payments. Furthermore, Akben stated that they are developing a technique based on bank indices. They will finish it before the annual general assemblies.

According to the Association of the Automotive Industry, production in the Turkish automotive industry increased by 6% to 1.35 million vehicles last year. With a production increase of 8.2% to almost 142,000 vehicles in December.

Car sales rose 7% to 827,000 vehicles last year, and December sales rose 83% to about 122,000 cars. According to Finance Minister Nureddin Nebati, Turkey’s budget deficit for the previous year was 139.1 billion lira ($7.4 billion). Analysts expect this year’s deficit to be less than 1% of the country’s GDP.

At a press conference, he also revealed that the main budget surplus in 2022 was TL 171.8 billion. According to the government’s medium-term economic plan, the budget deficit-to-GDP ratio was expected to be 3.4% in 2022.

According to the central bank of Turkey, the first transaction on the e-Lira network was completed successfully. Also, they intend to do more testing in 2023. They are looking into digital ID in addition to their CBDC because this is a crucial component for their CBDC to work.

If Turkey experiences a change of government, it will be fascinating to see if the potential new leader is as supportive of the CBDC as Erdogan has. In Turkey, where the value of the lira halved last year due to the ongoing financial crisis, cryptocurrency trading has mainly seen a surge in popularity.

Turkish economy and crypto

Inflation rates are astronomical. In Turkey, the annual inflation rate peaked at 78.35% in June, while the unemployment rate rose to 10%. Its monthly average international trade imbalance is now $8 billion. After the central bank unexpectedly cut interest rates amid persistent price pressure, annual inflation in Turkey is forecast to exceed 81% in August.

Hard currency debt totaling $182.4 billion must be paid off or reloaded in the coming year. In the next 12 months, the Turkish economy will require at least $220 billion. In addition, Turkey’s external debt, foreign trade and tourism obligations are experiencing new strains. This is due to the fall of the euro to parity with the dollar, which has only made the problems worse. Other things being equal, Turkey’s external deficit is rising again because the country receives most of its export and tourism revenue in euros.

President Erdoan unveiled a new financial plan. The scheme entices citizens to deposit their money in Turkish banks. To boost the value of the currency after the sharp fall in the lira in December.