Why did the Treasury borrow 2.5 times higher than the need?


The central government budget is among the fundamental economic texts for any economy. The 2022 budget was smashed at the very beginning due to the FX rate hike and high inflation. An additional budget was announced six months before the preparation of the 2023 budget. The budget balance was supposed to post a TRY 278.37bn deficit in line with the additional budget. The budget deficit was estimated to hit TRY 461.69bn in the 2023 budget. The 9-month budget deficit, which was clear when the 2023 budget was announced, totaled TRY 45.5bn in 2022. But the government estimated the budget balance to further post a TRY 415.7bn deficit in the last three months of the year. This didn’t happen and the budget balance posted a TRY 139bn deficit in 2022. So, the deficit was TRY 322bn less than the amount forecasted three months ago. The new net borrowing of the Treasury amounted to TRY 437bn versus its cash deficit of TRY 169bn in 2022. Thus, it borrowed 2.5 times higher than needed for the first time. The amount stocked in the Central Bank and public banks has reached TRY 330bn this year. Everything has been indexed to the election and the risk faced by the economy can’t overcome the calculation made to win the election.

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