Is the increase in net E&O before elections a coincidence?


The 8-month net errors and omissions (E&O) in the Turkish budget totaled USD 28.3bn. E&O have increased significantly this year. In Turkey, there has been a significant, indirect link between elections and E&O since 2011. Turkey grants fiscal amnesty before almost all elections. In this way, FX taken abroad or that which was supposed to be in Turkey but is held abroad, flows into the country. We don’t know where to register this FX and therefore write in the E&O column. But the FX inflow linked with elections can’t be based only on amnesty, as elections require expenditures, financing, and plenitude. So, it’s good to have FX and it’s necessary to find FX for elections. The 8-month USD 28.3bn net E&O should be evaluated in this context. 2016 was the only year without a link between elections and net E&O since 2011. A USD 10bn FX inflow in 2016 is worth noting. Amnesty was among the most important reasons for this inflow. Net E&O totaled USD 8.8bn in 2017 and broke an annual record. Net E&O is expected to increase in the last four months. We’ll see if it is collectively revised in December as it was in 2021 and if net E&O rapidly declines. A USD 18bn net E&O decreased by USD 10bn in January-November 2021 and decreased to USD 8bn for the entire year.

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