An intense economic agenda awaits the winner of the Presidential 2nd round election. While many problems, especially the exchange rate, interest, inflation, current account deficit, domestic and foreign debts, are waiting for a solution, the first job of the new government will be to issue an additional budget or make a new budget. It is calculated that the budget deficit will at least triple due to the heavy burden of election commitments, age-at-retirement (EYT), earthquake, increasing interest expenses and salary hikes, which will make a new budget of 1.5-2 trillion liras mandatory. Due to the budget marathon, the new Parliament will have to start with heavy budget shifts in the summer heat. The 2023 budget, which was prepared without considering the election promises and the size of the EYT, was prepared with an expenditure of 4 trillion 470 billion liras, a revenue of 3 billion 810 million liras and a deficit of 660 billion liras.
660 billion lira deficit will at least triple
According to the news of Erdoğan Süzer from Sözcü, an earthquake disaster that shook the country in February was added to the burdens brought by EYT with new election expenditures and promises added every day during the year. Calculations show that the deficit of 660 billion liras will at least triple, therefore, a new budget of at least 1.5-2 trillion liras must be made in order to meet the huge resource need. With the retirement of those at retirement age, SGK had to pay an additional salary to approximately 2-2.5 million new retirees this year. Even though the retirement process is slow, as the retirement process is based on the application date, when the end of the year is approached, hundreds of thousands of EYT members accumulated in March, April and May will be paid their accumulated pensions and holiday bonuses. The additional burden that EYT will bring to this year’s budget alone is expected to reach 300 billion liras.
Expenses will be tried to be financed with additional budget and borrowing.
It is stated that the cost of the earthquake to the economy, especially the public budget, will be over 35 billion dollars even with minimum calculations. The construction of infrastructures, roads and public buildings instead of the houses destroyed in the earthquake brought an additional burden of hundreds of billions to the budget. All these expenses, which cannot be covered by the current budget, will be tried to be financed with additional budget and borrowing.
Budgetary burden expected to increase significantly
The election will face a heavy cost pressure due to the use of public resources on the one hand and the election promises announced abundantly on the other. It was promised that a big increase would be made in the salaries of civil servants and retirees in July, especially after the big increase in public workers. Personnel and pension payments, which have an important place in the budget, will also be one of the most important expense items in the supplemental budget. Possible increases in the exchange rate after the elections are expected to significantly increase the burden on the budget due to the additional payments to be made to the Currency Protected Deposit accounts.
A professional writer by day, a tech-nerd by night, with a love for all things money.