The amount of transfers to budget from the Unemployment Fund reached 8.6 billion TL over the 2008-2010 October.

ANKARA- Non-budgetary revenues, privatization revenues and unemployment fund revenues predominant among them, contributed substantially to the recovery in the budget balance.  The amount of transfers to budget only from the Unemployment Fund reached 8.6 billion TL over the 2008-2010 October.

Fiscal Monitoring Report June-September 2010 Budget Results prepared by TEPAV Stability Institute has been announced. The report evaluated the budget results and involved a focus section with the title 'Evaluations on the 2009 Declaration of Conformance and Implementation Results Report by the Court of Accounts and Practical Advices to the Planning and Budgetary Commission of the Parliament for the Budget Negotiations'.

The report underlined that, non-budgetary revenues which are not considered within revenues in the program defined budget balance made a substantial contribution to the improvement in budget balance between 2004 and 2010. Stating that the share in total budget revenues of such items recorded as non-budgetary revenues in the program defined budget balance account varied between 4 and 9 percent, the Report maintained that non-budgetary revenues summed 11.361 million TL over the first ten months of the year. Out of this amount, 2.671 million TL came from privatization revenues, 2.999 million TL from interest revenues, 794 million TL from dividend income, 3.173 million TL through transfers from the Unemployment Fund and 1.724 million TL from other revenues.

The report assessed:

"When the contribution of such revenue items which are not included under the program defined revenue it is seen that:

-              Between 2005 and 2008 the share of privatization revenues in non-budgetary revenues stood at 40%. When interest revenues are excluded, this ratio reaches as high as 70%.

-              Over the 2009-2010 period where the impacts of the global crisis has been felt severely, the amount transferred from the Unemployment Insurance Fund as per the regulations introduced in the context of the 'mixed laws' reached 27% of the total non-budgetary revenue contribution. When interest revenues are excluded, the ratio reaches 40%.

Therefore apart from interest revenues, privatization revenues and transfers from the unemployment insurance fund constituted the fundamental non-budgetary revenue items determinant on the improvement in budget balance. In the case that normal sources of budget revenues, predominantly the tax revenues do not rise in the future, the possible drops in the said non-budgetary revenues will give way to a financial pressure."

Appreciation of the Lira...

Assessing the real appreciation in the value of the Turkish Lira the report said: "Economy's regaining the growth path and high interest rates on TL attract foreign fund inflows which prevent the deterioration of debt dynamics."

The report continued:

"Therefore, elevating budget expenditures sacrificing from primary surplus possibility currently is not seen to constitute a risk for the deterioration of the debt stock as a ratio to the GDP and this situation is expected to prevail until the 2011 elections. Nonetheless, given concerns on current account deficit which tended to grow gradually but is ignored by the markets at this stage coupled with the risk of fiscal policy deterioration more rapid and substantial than expected, the possibility of encountering certain public finance challenges should be bare in mind.  In this respect, steps to establish fiscal discipline can be visible as of the second half of the year."