The consolidated budget deficit nearly tripled in lira terms to TL 129.4 million million ($7,500 million) in 1993 from TL 43.6 million million ($2,764 million) a year earlier, according to Finance Minister Ismet Attila. The budget deficit was the main cause of the 71.1 per cent inflation rate in 1993.

The treasury’s attempts to cover the deficit by telling the central bank to print more money partly led to a build up of excess lira. This triggered a run on the lira following the mid-January risk downgradings from leading US ratings agencies (see above). Budget revenues met only 73.6 per cent of expenditure, which totalled TL 489.3 million million ($28,300 million) in 1993.

The deficit was caused mainly by personnel expenditure in the state sector, and interest payments on foreign and domestic debt. It was originally targeted at TL 53.3 million million ($3,380 million). In 1994, the government plans a record deficit of TL 192 million million ($12,175 million – MEED 14:1:94).