Turkey will spend extra $50 billion in mid-year budget

Turkey’s government plans to spend an additional 880.5 billion liras ($50.8 billion) after a surge in inflation prompted it to increase the salaries of employees, pensioners and hike the minimum wage, according to a draft mid-year budget submitted to parliament on Monday.

But the extra expenditure will be more than offset by an increase in revenue boosted by surging tax income. Revenue has almost doubled in the January-May period compared with a year earlier and the proposed budget sees it rising by 1,081 billion liras.

The government has said it will adjust the salaries of public sector workers and will not leave householders to bear the full brunt of a surge in living costs, raising speculation that it will increase the minimum wage for the second time in six months. Inflation in Turkey has accelerated to an annual 73.5 percent, the highest level since the late 1990’s.

The Turkish government has been able to raise more money in liras through import duties and taxes on petrol and other energy after the lira slumped against the dollar and euro. The currency slid by 44 percent against the dollar last year and has declined by more than 20 percent in 2022.

The government will allocate 14 percent of the extra spending to state-run companies that import natural gas and coal, according to the draft budget.  

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