‘Fiscal deterioration will accelerate’ – Last Minute Turkey & World News

SHAFAQNA TURKEY – transferred to the Commission; Pursuant to Section 11 of the Law to Amend Certain Laws and Ordinances having the Force of Law and the Honorable Pension Law to recipients of the Medal of Independence, pensioners and beneficiaries receiving an old-age/disability/death pension. The stipulated monthly minimum payment amount will be increased to 7 thousand 500 Turkish liras.

According to the 10th article of the same law, one thousand 100 Turkish liras paid during the holiday of Ramadan and Eid al-Adha will be increased to 2 thousand Turkish liras for those whose income and monthly payments are made in accordance with Law No. 5510 and related legislation by the Social Security Institution. The increase in the monthly minimum wage for pensioners will put a burden on the budget of any pensioner in the amount of 24 thousand Turkish liras.

For 1 million pensioners, the burden will increase to 24 billion Turkish liras. According to a statement by AKP Party Group Vice Chairman Mustafa Elitash, 6 million out of 13.6 million pensioners, including SSK and Bağ-Kur pensioners, will benefit from this arrangement.

Accordingly, while 45 percent of pensioners earn the minimum wage, if 6 million people receive a 2,000 Turkish lira increase, the additional burden that will fall on the treasury will be 144 billion Turkish liras per year.

A total increase of 1,800 TL for both retiree vacation bonuses would cost approximately 24 billion TL. The total load will increase to 168 billion Turkish liras. While EYT members typically receive salaries in excess of TL 5,500, raising this figure to TL 7,500 would result in budget allocations for this purpose not being taken into account.

This will push the 2023 budget

The introduction of EYT, the earthquake and earthquake spending, which were not included in the 2023 budget, has already rendered the 2023 budget balance unworkable. While spending has increased due to earthquakes, a decrease in tax revenue has become inevitable. While the budget had a surplus of 30 billion 44 million Turkish Lira in January 2022, it recorded a deficit of 32 billion 243 million Turkish Lira in January 2023.

While a primary surplus of TL 44 billion 276 million was recorded in January 2022, a primary deficit of TL 10 billion 883 million was recorded in January 2023. In January, tax revenue growth was capped at 7.9 percent. In February, when the earthquake struck, the deterioration of the income-expenditure balance accelerated. While in February 2022 the central government budget had a surplus of 69 billion 737 million Turkish liras, in February 2023 it showed a deficit of 170 billion 560 million Turkish liras.

While there was a primary surplus of TL 113 billion 406 million in February 2022, a primary deficit of TL 136 billion 337 million was recorded in 2023. The increase in tax revenues decreased from 8.2 percent to 5.6 percent. If we look at the two-month period of the year, from January to February 2023, the central government expenditures amounted to 710.7 billion Turkish liras, budget revenues – 507.9 billion Turkish liras, and the budget deficit – 202.8 billion Turkish liras.

In addition, the primary budget expenditures amounted to 655.1 billion Turkish liras, while the primary deficit was 147.2 billion Turkish liras. Thus, while in the period from January to February 2022 the central state budget showed a surplus of 99 billion 781 million Turkish liras, in the period from January to February 2023 it showed a deficit of 202 billion 802 million Turkish liras. While a primary surplus of TL 157 billion 682 million was recorded between January and February 2022, a primary deficit of TL 147 billion 220 million was recorded between January and February 2023.

The deterioration of the budget for the two-month period of the year, especially with the earthquake and EYT funding and pre-election spending, became inevitable for the preparation of a supplementary budget containing new income items after the election.

The bonus will benefit 15.6 million retirees, including EYT members.

Vedat Bilgin, Minister of Labor and Social Security, said in a statement on his social media account: “After the increase we made to the lowest pension, we are increasing the holiday bonus to 2,000 Turkish liras with an increase of 82 percent. 15.6 million retirees, including those who will retire under the EYT, will benefit from this rule. The Republic of Turkey supports its pensioners with its understanding of the welfare state. WORLD