Page 24 - TURKRptFeb21

6.0​ Public Sector
Turkey’s central government budget deficit has ​grown​ by 38% y/y to a record Turkish lira (TRY) 173bn ($23.2bn) in 2020.
Erdogan said that the budget deficit-to-GDP ratio stood at 3.6% in 2020 compared to 2.9% in 2019.
The statistics institute TUIK will on March 1 release Turkey’s official GDP figures for 2020. The official figures for both the numerator and denominator of the deficit-to-GDP ratio look rather questionable.
The Turkish Treasury’s cash deficit had also grown by 40% y/y to a new record of TRY182bn while its net borrowing was up 58% y/y to TRY241bn.
Turkey has so far had no problem in financing its budget deficits (the central bank and banking watchdog work to finance lira borrowing via the banking system while external financing is obtained via eurobond sales) but ​when the financing is coupled with huge loan growth​ in the country, the ​booming lira supply​ makes it ​impossible to keep the exchange rate steady​.
Turkey ​announced​ a 2021 public investment programme worth Turkish lira 138.5bn ($18.53bn).
“​If Turkey Wealth Fund (TWF or TVF) was a commercial enterprise, it would have been technically bankrupt​,” Nedim Turkmen of local daily Sozcu wrote​.
7.0​ Financial & capital markets 7.1​ Bank sector overview
7.1.1​ Earnings
The combined net income of Turkish banks showed a 21% y/y increase in the first 10 months of the year to stand at Turkish lira (TRY) 50bn, data from the banking regulator, BDDK, ​showed​.
However, the Turkish banking industry’s ratios and financials are synthetically off thanks to “regulatory forbearance”.
24​ TURKEY Country Report​ February 2021 ​ ​www.intellinews.com