Public Finance

Overview

Public finance deterioration accelerated in the 1990s as a result of the structural
problems of the Turkish economy and reached its peak level when the financial
crisis occurred in 2001.

By means of the Economic Program, the worsening of the trend has been
completely reversed and budgetary discipline has been established.


In 2005, the public sector primary surplus (IMF definition) is estimated to hit 6.5% of GNP Consolidated budget deficit, on the other hand, decreased from 16.2% of GNP in 2001 to 6% of GNP in 2005. A at the end of 2005, total outstanding external debts amounted to $64.5 billion (18% of GDP) whereas total domestic debt stock amounted to $182.4 billion (51% of GDP).

Moreover, the interest expenditures-to-GNP ratio plunged dramatically in 2002-2005; the non-interest expenditures-to-GENP ratio also dropped significantly in the referred period; tax revenues increased slightly in real terms in 2002-2005.

Thanks to the Economic Program, the total net public stock standing at 90.5 per cent of GNP decreased to 44.8 per cent at the end of 2006.



* Source: Directorate of Press and Information, Almanac 2007

At the end of 2006, the total outstanding external debts amounted to $69.2 billion (YTL 257.8 billion) whereas total domestic debt stock amounted to $189.2 billion (YTL 268.9 billion).The Central Government budget deficit, on the other hand, decreased from 16.0% of GNP in 2001 to 0.7% of GNP in 2006.

The above information has been obtained from The Office of the Economic Counsellor and The Ministry of Foreign Affairs.

(Last updated December 21, 2007 )

Economic Growth

Today, Turkey is the 17th largest economy in the world with a GNP of about USD 400 billion. As a matter of fact, Turkey has recorded a sustainable growth during the past 6 years. The growth rate was 6.1% in 2006. International Monetary Fund (IMF) predicts a growth of 5% in 2007 and 6% in 2008 respectively.

Interest rates, which are still high in comparison to most European countries, have been swiftly shrinking down to record low levels. It is also worth mentioning that instead of a policy of fiscal expansion and monetary loosening, growth has been driven mainly by the private sector.

* Source: Undersecretariat of Treasury

(Last updated December 21, 2007 )

For further information:

(www.treasury.gov.tr)

Istanbul Stock Exchange (www.ise.org)

Banks in Turkey: Bank Association of Turkey

General Directorate of Public Accounts (www.muhasebat.gov.tr)

(Last updated December 21, 2007 )