The government has submitted a substantially revised 1996 budget and economic programme to the country’s parliament. Most notably, the end-year inflation target has been revised upwards by 24 percentage points to 64 per cent.
However, the programme aims at 4.5 per cent growth in gross domestic product (GDP). The original version of the programme forecast a growth rate of 7.6 per cent, Finance Minister Lutfullah Kayalar said.
The forecast for the consolidated budget deficit has jumped to TL 800 million million ($12,220 million) from an original TL 410 million million ($6,265 million).
The budget and economic programme was first submitted in October, but held in abeyance for the new government to emerge from the December general elections (MEED 3:11:95). It must be approved by parliament before 30 April, when a provisional, four-month budget expires.
The budget’s imports target has been raised by 9.3 per cent to $41,000 million, largely due to entry into the customs union with the EU at the beginning of the year.
The export target is $25,000 million, a slight increase on the previous estimate.
Consequently, the visible trade deficit target is up 20.3 per cent to $16,000 million.
The programme also forecasts an end-year exchange rate of $1=TL 75,000, compared with TL 62,855 in the October version.
A new target for the end-year current account balance will be set following meetings to be held soon between the State Planning Organisation (SPO), the treasury and the central bank on expected invisible trade flows, according to SPO officials.