Lecture Notes 11

Public Budget

Prof. Metin Ercan

Public Sector vs. General Government
• According to 'Government Financial Statistics Manual
(GFSM) 2014 by IMF, public sector and its relation to
other institutional sectors of the economy are as follows:

• 'General Government' (genel yönetim) concept is similar

to (Consolidated) 'Public Sector' (konsolide kamu
sektörü) in terms of scope except for the public
corporations (SEE – state economic enterprises; KİT’ler
– kamu iktisadi teşekkülleri)
2
 Public Sector as per GFSM 2017 by IMF
PUBLIC SECTOR

GENERAL PUBLIC
GOVERNMENT CORPORATIONS

Central Budgetary
Government Financial Non-
Extra-budgetary Financial
State
Governments Social Security
Funds
Local Deposit Other
Governments taking

Social
Security Central Other
Funds Bank

• 'Social security funds' can be a part of central government or as a separate item under general
government according to GFSM 2017. In Turkey, they are accounted for (separate from and) not
under central government.
• 'State governments' item applies to countries where both federal and state governments exist e.g.
USA.
3
Stock and Flow
• Public sector statistics should distinguish
between:
– Stock (balance sheet: shows asset and liabilities)
– Flows (statement of operations/budget: shows
revenues and expenses)

• GFSM 2014 relates stock positions and flows

4
 Stock and Flow
STOCK

FLOW

Opening Statement of Statement of Closing

balance operations* other economic balance sheet
sheet flows
Other economic
Assets & Revenues Assets &
flows in assets &
liabilities / expenses liabilities
liabilities**

* Faaliyet sonuçları tablosu

** Changes to stock positions of assets, liabilities, and net worth that come about for reasons
other than transactions e.g. holding gains and losses represent changes to stock positions that arise
from price movements, including exchange rate movements, Other changes in the volume of assets
represent changes to stock positions arising from events such as the discovery of new assets/liabilities
(e.g., mineral deposits/reserves), depletion or destruction of assets, or reclassification of
assets/liabilities.

5
Timeline of Recent Government Financial
Accounting Regulations
• 2003: Public Financial Management and Control Law, No:
5018 (Kamu Mali Yönetimi ve Kontrol Kanunu) (Official
Gazette 24.12.2003/25326) (‘Law 5018’ for short)
• 2005: General Government Accounting Regulation (Genel
Yönetim Muhasebe Yönetmeliği) (Official Gazette
8.6.2005/25839) (‘2005 Regulation’ for short)
• 2012: General Government Financial Statistics General
Communique (Genel Yönetim Mali İstatistikleri Genel Tebliğ)
(Official Gazette 6.4.2012/28256) (‘2012 Communique’ for
short)
• 2014: General Government Accounting Regulation (Genel
Yönetim Muhasebe Yönetmeliği) (Official Gazette
23.12.2014/29214) (replaced the 2005 regulation) (‘2014
Regulation’ for short)

6
Timeline of Recent Government Financial
Accounting Regulations
• 2018: Decree-law, No: 703 (Kanun Hükmünde Kararname)
(Official Gazette 09.07.2018/30473)(‘703 sayılı Kanun
Hükmünde Kararname ’ for short)

7
Definitions of Public Sector Statistics
• In Turkey, different budget types are defined by Law
5018
• 'Consolidated Public Sector' (konsolide kamu sektörü)
statistics as prepared by Treasury were ceased to be
disseminated at the end of 2012
• 2005 Regulation, 2012 Communique and 2014
Regulation redefines government financial statistics
according to international standards
• 2018 Decree Law changed the organization names &
organization schemes of government. (Ministry of
Treasury and Finance)

8
Definitions of Public Sector Statistics
• With the 2014 Regulation, Turkish statistics will
be more aligned with international standards
such as:
– 'Government Financial Statistics Manual 2014'
(GFSM 2014) by IMF
– 'European System of Accounts 2010' (ESA 2010) by
EUROSTAT and
– 'System of National Accounts 2008' (SNA 2008) by
United Nations

9
Budget Types and Scope (EN)
GENERAL GOVERNMENT STATISTICS

CENTRAL GOVERNMENT STATISTICS

CENTRAL GOVERNMENT BUDGET SOCIAL SECURITY
INSTITUTIONS
BUDGET
GENERAL BUDGET

LOCAL
GOVERNMENT
SPECIAL BUDGET BUDGET

REGULATORY AND
SUPERVISORY AGENCY
BUDGET

EXTRA BUDGETARY
INSTITUTIONS

10
Budget Types and Scope (TR)
GENEL YÖNETİM İSTATİSTİKLERİ

MERKEZİ YÖNETİM İSTATİSTİKLERİ

MERKEZİ YÖNETİM BÜTÇESİ SOSYAL
GÜVENLİK
KURUMLARI
GENEL BÜTÇE
BÜTÇESİ

MAHALLİ
ÖZEL BÜTÇE İDARELER
BÜTÇESİ
DÜZENLEYİCİ VE DENETLEYİCİ
KURUMLAR

BÜTÇE DIŞI KURUMLAR

11
Avoid Confusions
• General Government vs. General Budget:
– ‘General Government’ includes Central Government,
Social Security Institutions and Local Governments
– General Budget is a part of the Central Government
Budget
• Central Government vs. General Budget:
– General Budget is a subset of Central Government
Budget
• General Government vs. Central Government:
– General government is the broadest definition
including Central Government, Social Security
Institutions Budget and Local Government Budget

12
Budget Types and Scope
• Budgets of the administrations within the scope
of general government shall be prepared and
implemented in the form of (5018, Article 3)
– Central government budget,
– Social security institution budgets
– Local administration budgets.

• Central Government Statistics announced by the

Ministry of Treasury and Finance also include
extra budgetary institutions

13
Budget Types and Scopes
• Law 5018, Article 12 defines:
– Central government budget
• General budget
• Special budget
• Regulatory and supervisory agency budget
– Social security institution budget
– Local governement budget

• According to the same article, Ministry of

Treasury and Finance is in charge of preparation
and application of budgets in line with
international standards.

14
Budget Types and Scope - Summary
• Central Government Budget (merkezi yönetim
bütçesi) includes:
– General budget (genel bütçe) (public administrations which are
under the legal entity of the government)
– Special budget (özel bütçe) (public administrations affiliated or
related to a ministry for performance of a defined public service,
with allocated revenues and regulated by special law)
– Regulatory and supervisory agency budget (düzenleyici
ve denetleyici kurumlar bütçesi) (in the form of board, agency
or supreme board by special laws)
• Social security institution budget (sosyal güvenlik
kurumları bütçesi) (public administrations established
by law to provide social security services)
• Local government budget (mahalli idareler bütçesi)
(public administrations within the scope of the local
government)
15
Budget Types and Scope
• Central government budget (merkezi
yönetim bütçesi) consists of the budgets of
public administrations included in:
– General budget
– Special budget
– Regulatory and supervisory agency budget
• 2012 communique defines extra budgetary
funds, social facilities, revolving funds and other
extra budgetary institutions as part of 'central
government' although they are not included in
the 'central government budget'

16
Budget Types and Scope (cont’d)
• General Budget (genel bütçe) consists of the
budgets of following public administrations which
are under the legal entity of the government:
• Turkish Grand National Assembly • Ministries (Justice, National
(TBMM) Defense, Interior, Foreign Affairs,
• Presidency of the Republic of Treasury and Finance, National
Turkey Education, Health, Transport and
Infrastructure, Labour, Social
• Courts:
– Constitutional Court (Anayasa Mah.)
Services and Family, Energy and
– Supreme Court (Yargıtay),
Natural Resources, Culture and
– Court of Accounts (Sayıştay) Tourism, Science, Industry and
• Councils: Technology, Environment and
– Council of State (Danıştay),
Urbanization, Trade, Youth and
– Supreme Council of Judges and Public Sports, Food, Agriculture and
Prosecuters (Hakimler ve Savcılar Forestry)
Yüksek Kurulu)

www.mevzuat.gov.tr/MevzuatMetin/1.5.5018.doc

17
Budget Types and Scope (cont’d)
• General Budget (con’t):
• General Secretariat of National
Security Council (MGK)
• National Intelligence Organization
(MİT)
• General Command of
Gendarmeries (Jandarma Genel
Komutanlığı)
• Coast Guard Command (Sahil
Güvenlik Komutanlığı)
• Directorate General of Security
(Emniyet Genel Müdürlüğü)
• Presidency of Religious Affairs
(Diyanet İşleri Başkanlığı)
18
• State Personnel Presidency
(Devlet Personel Başkanlığı)
• Turkish Statistical Institute
(Türkiye İstatistik Kurumu, TÜİK)
• Disaster and Emergency
Management Authority (Afet ve
Acil Durum Yönetimi Başkanlığı)
• Revenue Administration (Gelir
İdaresi Başkanlığı)
• Directorate General of Land
Registry and Cadastre (Tapu ve
Kadastro Genel Müdürlüğü)
• Directorate General of
Meteorological Service
(Meteoroloji Genel Müdürlüğü)
*www.mevzuat.gov.tr/MevzuatMetin/1.5.5018.doc
Budget Types and Scope (cont’d)
• General Budget (con’t):
• Directorate General of Migration • *For this directorate, there is no
Management (Göç İdaresi Genel official translation
Müdürlüğü)
• Directorate for EU Affairs (Avrupa
Birliği Başkanlığı)
• Directorate of State Archives*
(Devlet Arşivleri Başkanlığı)
• Directorate of Communications
(İletişim Başkanlığı)
• Presidency of National Palaces
Administration (Milli Saraylar
İdaresi Başkanlığı)
• Directotate of Strategy and
Budget* (Strateji ve Bütçe
Başkanlığı)
**www.mevzuat.gov.tr/MevzuatMetin/1.5.5018.doc

19
Budget Types and Scope (cont’d)
• Special budget (özel bütçe): Budget of public
administrations;
– established as affiliated or related to a ministry for
performance of a defined public service,
– to which revenues are allocated,
– and which are authorized to spend from such
revenues,
– of which establishment and operation principles are
regulated by special law

20
Budget Types and Scope (cont’d)
• Special budget administrations (cont’d):
• Council of Higher Education (YÖK) • Turkish Language Institute (TDK)
• Presidency of Measurement, • Turkish Historical Society (TTK)
Selection and Placement Center • The Scientific and Technical
(ÖSYM) Research Council of Turkey (Türkiye
• Universities and institutes of Bilimsel ve Teknolojik Araştırma
technology Kurumu, TÜBİTAK)
• Directorate of Defence Industries • Turkish Academy of Sciences
(Savunma Sanayii Başkanlığı) (Türkiye Bilimler Akademisi, TÜBA)
• Atatürk Supreme Council for • Turkish Accreditation Agency (Türk
Culture, Language and History Akreditasyon Kurumu)
(Atatürk Kültür, Dil ve Tarih Yüksek • Turkish Standards Institution (Türk
Kurumu) Standartları Enstitüsü, TSE)
• Atatürk Research Centre (Atatürk • Turkish Patent and Trademark
Araştırma Merkezi) Office Institute (Türk Patent ve
• Atatürk Cultural Centre (Atatürk Marka Kurumu)
Kültür Merkezi, AKM)

21
Budget Types and Scope (cont’d)
• Special budget administrations (cont’d):
• National Boron Research Institute
(Ulusal Bor Araştırma Enstitüsü)
• Turkish Atomic Energy Authority
(Türkiye Atom Enerjisi Kurumu)
• Presidency of Development and
Support of Small and Medium Size
Enterprises Administration
(KOSGEB)
• Turkish International Cooperation
and Coordination Agency (Türk
İşbirliği ve Koordinasyon Ajansı
Başkanlığı, TİKA)
*www.mevzuat.gov.tr/MevzuatMetin/1.5.5018.doc
22
• ‘Directorate General’s:
– Credit and Dormitories Agency
(Yükseköğrenim Kredi ve Yurtlar
Kurumu)
– Highways (Karayolları Genel Müdürlüğü)
– Sports (Spor Genel Müdürlüğü)
– State Theaters (Devlet Tiyatroları Genel
Müdürlüğü)
– State Opera and Ballet (Devlet Opera ve
Balesi Genel Müdürlüğü)
– Forestry (Orman Genel Müdürlüğü)
– Foundations (Vakıflar Genel Müdürlüğü)
– Health for Borders and Coastal Areas of
Turkey (Türkiye Hudut ve Sahiller Sağlık
Genel Müdürlüğü)
– Mineral Research and Exploration (Maden
Tetkik ve Arama Genel Müdürlüğü)
– Civil Aviation (Sivil Havacılık Genel
Müdürlüğü)
– State Hydraulic Works (Devlet Su İşleri
Genel Müdürlüğü)
Budget Types and Scope (cont’d)
• Special budget administrations (cont’d):
• Privatization Administration
(Özelleştirme İdaresi Başkanlığı,
ÖİB)
• Other presidencies:
– GAP Regional Development
Administration (GAP Bölge Kalkınma
İdaresi),
– Manuscript Works Agency (Türkiye
Yazma Eserler Kurumu Başkanlığı),
– East Anatolian Project Regional
Development Administration (Doğu
Anadolu Projesi Bölge Kalkınma
İdaresi Başkanlığı),
– Konya Plain Project Regional
Development Administration –(Konya
Ovası Projesi Bölge Kalkınma İdaresi
Başkanlığı),
– Eastern Black Sea Project Regional
Development Administration (Doğu
Karadeniz Projesi Bölge Kalkınma
İdaresi Başkanlığı)
23
• Kamu Denetçiliği Kurumu (The
Ombudsman Institution)
• Agency for Workshops in
Punishment and Execution
Establishments and Custodies
(Ceza ve İnfaz Kurumları ile
Tutukevleri İş Yurtları Kurumu)
• Agency for the Turks Living
Overseas and Relative
Communities (Yurtdışı Türkler ve
Akraba Topluluklar Başkanlığı)
• Turkish Water Institute (Türkiye Su
Enstitüsü)
• Vocational Proficiency Institution
(Meslekî Yeterlilik Kurumu)
• Turkish Drug and Medical Device
Institution (Türkiye İlaç ve Tıbbî
Cihaz Kurumu)
Budget Types and Scope (cont’d)
• Special budget administrations (cont’d):
• Fuel Supply and NATO POL
Facilities Operating Agency (Milli
Savunma Bakanlığı Akaryakıt İkmal
ve NATOPOL Tesisleri İşletme
Başkanlığı)
• Turkish Radio and Television
Corporation (Türkiye Radyo
Televizyon Kurumu, TRT),
• Press Advertisement Agency
(Basın İlan Kurumu Genel Müdürlüğü,
BİK),
• Fund of Bail (Kefalet Sandıkları) •
• Turkish Sugar Authority (Şeker
Kurumu)
24
• Extra budgetary institutions
(bütçe dışı kurumlar):
– Support and Price Stabilization
(Destekleme ve Fiyat İstikrar Fonu)
– Social Aid and Solidarity Incentive
(Başbakanlık Sosyal Yardımlaşma ve
Dayanışmayı Destekleme Fonu)
– Defense Industry Support (Savunma
Sanayi Destekleme Fonu)
– Privatization (Özelleştirme Fonu),
– Prime Ministry Promotion (Başbakanlık
Tanıtma Fonu)
• Social facilities (sosyal tesisler)
Revolving funds (döner
sermayeler)
Budget Types and Scope (cont’d)
• Regulatory and supervisory agency budget
is the budget of regulatory and supervisory
agencies established in the form of board, agency
or supreme board by special laws:
• Radio and Television Supreme • Public Procurement Agency (Kamu
Council (Radyo ve Televizyon Üst İhale Kurumu, KİK)
Kurulu, RTÜK) • Turkish Competition Authority
• Information and Communications (Rekabet Kurulu, RK)
Technologies Authority (Bilgi • Public Oversight, Accounting and
Teknolojileri ve İletişim Kurumu, Auditing Standards Authority (Kamu
BTK) Gözetimi, Muhasebe ve Denetim
• Capital Markets Board (Sermaye Standartları Kurumu, KGK)
Piyasası Kurulu, SPK) • Personal Data Protection Authority
• Banking Regulation and Supervision (Kişisel Verileri Koruma Kurumu)
Agency (Bankacılık Düzenleme ve • Nuclear Regulatory Authority
Denetleme Kurumu, BDDK) (Nükleer Düzenleme Kurumu)
• Energy Market Regulation Board
(Enerji Piyasası Düzenleme
Kurumu, EPDK) 25 *www.mevzuat.gov.tr/MevzuatMetin/1.5.5018.doc
Budget Types and Scope (cont’d)
• Social security institution budget refers to the
budget of public administrations established by
law to provide social security services:

– Social Security Institution (Sosyal Güvenlik Kurumu,

SGK)
– Directorate General of Turkish Labour Authority
(Türkiye İş Kurumu Genel Müdürlüğü)

26
Budget Types and Scope (cont’d)
• Local government budget (mahalli idareler
bütçesi) refers to the budgets of public
administrations within the scope of the local
administration:

– Provincial administrations and to associations and

administrations related to or established by them,
or where they are a member which perform public
activities with authorities limited to specific
geographic regions and services.

27
Budget Types and Scope (cont’d)
• Local government budget (according to 2012
communique):
– Municipalities (belediyeler)
– Institutions affiliated to the municipalities (bağlı
idareler)
– Provincial special administrations (il özel idareleri)
– Local government unions (mahalli idare birlikleri)
– Development agencies (kalkınma ajansları)
– Provincial youth & sport agencies (gençlik hizmetleri
ve spor il müdürlükleri)

28
Budget Types and Scope (cont’d)
• General Government Statistics (genel yönetim mali
istatistikleri) are prepared according to the 2005
Regulation, 2012 Communique and 2014 Regulation by
the Ministry of Finance (MoF)

• General Government Statistics

– Includes Central Government, Social Security Funds and
Local Government
– Extra budgetary funds are included in Central
Government in statement of operations but excluded
from budget realizations
– EXCLUDES public corporations (Central Bank, other
financial public corporations and non-financial public
corporations)

29
Bases of Accounting
• In compiling government financial statistics, two
bases of accounting are followed for different
purposes (GFSM 2014, p.85):
– Accrual basis: Transactions are recorded when the
underlying activities, transactions, or other events
occur that create the unconditional claims to
receive the taxes or other types of revenue (e.g.: tax
revenues are recorded when they become receivable
whether they are actually received)
– Cash basis: Transactions are recorded when cash
payments for the respective revenue categories are
received (e.g.: tax revenues are recorded when they
are actually received in cash)

30
Budget vs Statement of Operations
• Two reported tables (2014 Regulation, Article 4):
– Budget: Document showing revenues and expenses
forecasted for a definite period and the rules for the
realizations of those revenues and expenses
– Statement of operations (faaliyet sonucu): Revenues
and expenses arising from operations
• General Government Statistics include both:
- Statement of operations reported in accrual basis
(Article 6)
- Budget realizations reported in cash basis (Article 7)
• Extra budgetary funds are included in Central
Government in statement of operations but excluded
from budget realizations

31
Stock and Flow
• In Turkey, both stock and flow tables are
prepared by the Ministry of Treasury and
Finance as a part of 'General Government
Financial Statistics Bulletin' according to
international standards:
– Balance sheet (bilanço)
– Statement of operations (faaliyet sonuçları tablosu)
– Cash flow table (nakit akım tablosu)
– Domestic and foreign debt table (iç ve dış borç
tablosu)
– Budget realizations (bütçe uygulama sonuçları)

32
 General Government Statistics 2018, k TL
STATEMENT OF
Central Social Security Local Government
OPERATIONS
Government** Funds Sub-sector Sub-sector
2018

Revenue 861,329,706 390,398,733 130,552,944

Expense 992,248,647 369,002,143 114,988,120
Net operating
(130,918,941) 21,396,590 15,564,825
balance

REALIZATIONS
OF GENERAL Central Social Security
Local Government General Government*
GOVERNMENT Government** Funds
BUDGET 2018
Revenue 832,609,358 374,958,689 125,574,828 1,157,924,145
Expense 789,209,095 361,945,626 78,134,834 1,054,070,824
Net operating
43,400,263 13,013,063 47,439,994 103,853,321
balance

*Difference between sums of constituents and the general government is due to consolidation.
** Statement of operations includes extra budgetary institutions under Central Government while budget
realizations do not.

33
Historic Budget Statistics
• Central Government Budget* / GDP
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Revenues 22.4 23.8 22.1 21.6 21.3 22.7 22.0 21.6 21.1 21.6 21.9
Primary Expenses 18.1 18.7 18.9 17.7 16.6 16.9 16.7 17.6 17.7 21.5 21.2
Interest Expenses 12.0 16.7 14.4 12.5 9.8 6.8 5.8 5.5 5.1 5.3 4.2
Primary Balance 4.3 5.1 3.2 3.9 4.7 5.8 5.2 4.0 3.3 0.0 0.7
Balance -7.7 -11.6 -11.2 -8.6 -5.0 -1.0 -0.6 -1.6 -1.8 -5.3 -3.5

2011 2012 2013 2014 2015 2016 2017

Revenues 21.3 21.2 21.5 20.8 20.6 21.2 20.6
Primary Expenses 19.5 20.0 19.8 19.5 19.4 20.5 20.3
Interest Expenses 3.0 3.1 2.8 2.4 2.3 1.9 2.0
Primary Balance 1.8 1.2 1.7 1.3 1.3 0.8 0.4
Balance -1.3 -1.9 -1.0 -1.1 -1.0 -1.1 -1.6

* All figures have been taken from the www.sbb.gov.tr/butce website

(T.C. Cumhurbaşkanlığı Strateji ve Bütçe Başkanlığı) and compared
with the data from General Directorate of Budget and Fiscal Control.

34
Central Government Budget Format
CENTRAL GOVERNMENT BUDGET REVENUES MERKEZİ YÖNETİM BÜTÇE GELİRLERİ

I. GENERAL BUDGET REVENUES I. GENEL BÜTÇE GELİRLERİ

Tax Revenues Vergi Gelirleri
Direct Taxes Dolaysız Vergiler
Indirect Taxes Dolaylı Vergiler
Other Diğer
Enterprise and Ownership Revenues Teşebbüs ve Mülkiyet Gelirleri
Grants, Aids and Special Revenues Alınan Bağışlar ve Yardımlar
Interests, Shares and Fines Faizler, Paylar ve Cezalar
Capital Revenues Sermaye Gelirleri
Receivable Collections Alacaklardan Tahsilatlar
II. REVENUES OF SPECIAL BUDGET AGENCIES II. ÖZEL BÜTÇELİ İDARELERİN GELİRLERİ
III-REVENUES OF REG. & SUPERVISORY INSTITUTIONS III. DÜZENLEYİCİ, DENETLEYİCİ KUR. GELİRLERİ

CENTRAL GOVERNMENT BUDGET EXPENDITURES MERKEZİ YÖNETİM BÜTÇE HARCAMALARI

A) Primary Expenditures Faiz Hariç Bütçe Giderleri

Compensation of Employees Personel Giderleri
Social Security Contributions SGK'ya Devlet Primi Giderleri
Good and Services Purchases Mal ve Hizmet Alım Giderleri
Current Transfers Cari Transferler
1. Duty Losses 1. Görev Zararları
2. Treasury Aid 2. Hazine Yardımları
3. Transfers to Non-Financial Establishment 3. Kar Amacı Gütmeyen Kur. Transferler
4. Transfers to Households 4. Hane Halkına Yapılan Transferler
5. Agricultural Subsidy 5. Tarımsal Destekleme
6. Other Transfers to Households 6. Hane Halkına Yapılan Diğer Transferler
7. Social Transfers 7. Sosyal Amaçlı Transferler
8. Foreign Transfers 8. Yurtdışına Yapılan Transferler
9. Shares from Revenues 9. Gelirlerden Ayrılan Paylar
Capital Expenditures Sermaye Giderleri
Capital Transfers Sermaye Transferleri
Lending Borç Verme
B) Interest Faiz Giderleri
Domestic Interest İç Borç Faizi
Foreign Debt Interest Dış Borç Faizi
Discount and Short Term Transactions İskonto ve Kısa Vadeli İşl. Ait Faiz ve Diğer

CENTRAL GOVERNMENT BUDGET PRIMARY BALANCE MERKEZİ YÖNETİM BÜTÇE FAİZ DIŞI DENGESİ

CENTRAL GOVERNMENT BUDGET BALANCE MERKEZİ YÖNETİM BÜTÇE DENGESİ

35
Central Government Budget Format
DEFERRED PAYMENTS BÜTÇE EMANETLERİ
OTHER DEFERRED PAYMENTS DİĞER EMANETLER
ADVANCES AVANSLAR

CENTRAL GOVERNMENT BUDGET CASH BALANCE MERKEZİ YÖNETİM BÜTÇE NAKİT DENGESİ

CENTRAL GOVERNMENT BUDGET FINANCING MERKEZİ YÖNETİM BÜTÇE FİNANSMANI

BORROWING (NET) BORÇLANMA (NET)

FOREIGN BORROWING (NET) DIŞ BORÇLANMA (NET)
Receipts Kullanım
Payments Ödeme
DOMESTIC BORROWING (NET) İÇ BORÇLANMA (NET)
-TL Denominated T-Bills -TL Cinsinden Hazine Bonosu
Receipts Satış
Payments Ödeme
-TL Denominated G-Bonds -TL Cinsinden Devlet Tahvili
Receipts Satış
Payments Ödeme
-FX Denominated G-Bonds -Döviz Cinsinden Devlet Tahvili
Receipts Satış
Payments Ödeme
NET LENDING (-) NET BORÇ VERME (-)
LENDING BORÇ VERME
REPAYMENT (-) GERİ ÖDEME (-)
PRIVATIZATION RECEIPTS ÖZELLEŞTİRME GELİRİ
SDIF REVENUE SURPLUS TMSF GELİR FAZLALARI
CURRENCY/DEPOSIT AND OTHER TRANSACTIONS KASA/BANKA VE DİĞER İŞLEMLER

36
Central Government Budget (Until the end of
2022 TL mio)
CENTRAL GOVERNMENT BUDGET REVENUES 2.802.355 CENTRAL GOVERNMENT BUDGET EXPENDITURES 2.941.420

I. GENERAL BUDGET REVENUES 2.740.573 A) Primary Expenditures 2.630.517

Tax Revenues 2.353.286 Compensation of Employees 615.278
Direct Taxes 890.459 Social Security Contributions 96.842
Indirect Taxes 1.462.827 Good and Services Purchases 257.076
Other 387.287 Current Transfers 1.126.152
Enterprise and Ownership Revenues 104.675 1. Duty Losses 48.387
Grants, Aids and Special Revenues 30.859
2. Treasury Aid 449.696
Interests, Shares and Fines 236.810
3. Transfers to Non-Financial Establishment 9.310
Capital Revenues 12.361
4. Transfers to Households 14.134
Receivable Collections 2.583
5. Agricultural Subsidy 39.642
II. REVENUES OF SPECIAL BUDGET AGENCIES 48.936
III-REVENUES OF REG. & SUPERVISORY INSTITUTIONS 12.847 6. Other Transfers to Households 157.880
7. Social Transfers 44.385
8. Foreign Transfers 10.642
9. Shares from Revenues 352.076
Capital Expenditures 276.403
Capital Transfers 48.822
Lending 209.944
B) Interest 310.903
Domestic Interest 195.528
Foreign Debt Interest 79.565
Discount and Short Term Transactions (**) 35.811

CENTRAL GOVERNMENT BUDGET PRIMARY BALANCE 171.838

CENTRAL GOVERNMENT BUDGET BALANCE -139.065

37
Central Government Budget Financing (Until the end
of 2022 TL mio)
CENTRAL GOVERNMENT BUDGET BALANCE -139.065

DEFERRED PAYMENTS 12.945

ADVANCES -21.698

CENTRAL GOVERNMENT BUDGET CASH BALANCE -147.818

CENTRAL GOVERNMENT BUDGET FINANCING 147.818

BORROWING (NET) 469.366

FOREIGN BORROWING (NET) 95.772
Receipts 215.027
Payments -119.255
DOMESTIC BORROWING (NET) 373.594
-TL Denominated T-Bills 8.977
Receipts 25.453
Payments -16.476
-FX Denominated T-Bills 0
Receipts 0
Payments 0
-TL Denominated G-Bonds 399.858
Receipts 554.348
Payments -154.490
-FX Denominated G-Bonds -35.240
Receipts 70.657
Payments -105.897
NET LENDING (-) -2.934
LENDING 0
REPAYMENT (-) 2.934
PRIVATIZATION RECEIPTS 0
SDIF REVENUE SURPLUS 0
CURRENCY/DEPOSIT AND OTHER TRANSACTIONS -324.482

38
Central Government Budget (2022) (% of GDP)
CENTRAL GOVERNMENT BUDGET REVENUES 18,67% CENTRAL GOVERNMENT BUDGET EXPENDITURES 19,60%

I. GENERAL BUDGET REVENUES 18,26% A) Primary Expenditures 17,53%

Tax Revenues 15,68% Compensation of Employees 4,10%
Direct Taxes 5,93% Social Security Contributions 0,65%
Indirect Taxes 9,75% Good and Services Purchases 1,71%
Other 2,58% Current Transfers 7,50%
Enterprise and Ownership Revenues 0,70% 1. Duty Losses 0,32%
Grants, Aids and Special Revenues 0,21% 2. Treasury Aid 3,00%
Interests, Shares and Fines 1,58% 3. Transfers to Non-Financial Establishment 0,06%
Capital Revenues 0,08% 4. Transfers to Households 0,09%
Receivable Collections 0,02% 5. Agricultural Subsidy 0,26%
II. REVENUES OF SPECIAL BUDGET AGENCIES 0,33% 6. Other Transfers to Households 1,05%
III-REVENUES OF REG. & SUPERVISORY INSTITUTIONS 0,09% 7. Social Transfers 0,30%
8. Foreign Transfers 0,07%
9. Shares from Revenues 2,35%
Capital Expenditures 1,84%
Capital Transfers 0,33%
Lending 1,40%
B) Interest 2,07%
Domestic Interest 1,30%
Foreign Debt Interest 0,53%
Discount and Short Term Transactions (**) 0,24%
0,00%
CENTRAL GOVERNMENT BUDGET PRIMARY BALANCE 1,15%

• Central Government Budget expenditures make up 19.6 percent of

GDP as of 2022.
39
Central Government Budget (2019, TL mio)

40
Central Government Budget Financing (2019, TL mio)

41
Central Government Budget (2019) (% of GDP)

• Central Government Budget expenditures make up 22.3 percent of

GDP as of 2018.
42
Central Government Budget (2019) (% of GDP)

43
Budget Balance vs Primary Balance
• Illustrative Example:

Expenditures Primary (non-interest) expenditures (100)

Primary (non-interest) (100) Tax Revenues 130
Interest (80) Primary balance 30
Total (180)

Tax revenues 130

Budget balance (50)

44
Budget Balance Definitions
Conventional (or Nominal)
Budget Balance
(pessimistic)
If government debt is high you
see high budget deficit although
there is strong fiscal efforts (i.e.
reducing government
expenditures and increasing
revenues)
Large deficit may be due to past
stock of debt
Primary Balance Operational Budget Balance
(optimistic)
Excludes payments on In between primary +
government debts and conventional budget deficit.
foreign debt. Removes inflationary
component of interest
It indicates whether expenditures from the
revenues cover non- conventional budget.
interest expenditures
Primary + real interest
payments
(Inflation erodes the nominal
value)
45
 Real Interest Payments
• In operational deficit, the real component of interest
payments is included
• 3 approaches to calculate real interest payments:
1) Inflation – Adjustment Factor on Debt Stock Approach:
Real interest = Nominal domestic - Average outstanding cash and non-cash debt stock x
payment interest payment inflation rate

2) Real – Interest Rate Adjustment Approach:

Real interest = Real interest rate on x Average outstanding cash and non-cash debt stock
payment domestic borrowing

3) Producer Price Index (PPI) – Adjusted Interest Payments

Approach:
Real interest = Nominal domestic - Inflation Adjustment
payment interest payments (Nominal domestic interest payment x inflation rate)

46
Financing a Budget Deficit

(According to ‘Fischer and Easterly 1990’)

1) Money Printing (associated with inflation)
2) Using F/X Reserves (capital flight + BOP crisis)
3) Foreign Borrowing (external debt crisis)
4) Domestic Borrowing (high real interest rates
and crowding out of private investment)

47
•
"Crowding out" refers to a phenomenon in economics where increased government
spending or borrowing reduces the availability of funds for private investment. It occurs
when government borrowing in financial markets leads to higher interest rates, which in turn
discourages private sector borrowing and investment.
• When the government engages in deficit spending, it increases its demand for funds in the
financial market. This increased demand can push up interest rates as lenders seek higher
returns on their loans. As interest rates rise, borrowing costs for businesses and individuals
also increase, making it more expensive for them to invest or borrow money for productive
purposes.
• The higher interest rates and reduced availability of funds for private investment can lead to
a decrease in private sector spending and investment. This phenomenon is called crowding
out because government borrowing "crowds out" private sector borrowing and investment
by occupying a larger share of available funds.
• Crowding out can have implications for economic growth, as reduced private investment can
limit productivity gains, job creation, and overall economic expansion. However, the extent
and impact of crowding out can vary depending on the overall economic conditions, the size
of the government deficit, and other factors influencing the financial market.
• It's worth noting that the concept of crowding out is a topic of ongoing debate among
economists, and there are differing views on its significance and implications in different
economic contexts.

48
National Income Accounting Identity
• It shows the effect of the deficit/surplus on domestic savings and
investment and the current account balance.
• Saving – Investment Identity

Y = C + I + G + (X - M)
↑ ↑ ↑ ↑ ↑ ↑
National Consumption Investment Government Exports Imports of
income expenditures of goods goods and
and services
services
• Subtracting taxes and by rearranging T = taxes

Y-C-T = I + G-T + (X-M)

Saving Investment Budget deficit Current account balance
(S) (deficit/surplus)

S = I + Budget Balance + Current Account Balance

49
National Income Accounting Identity

• Example:
If S = 100, I=50, G-T=30
S – I – (G-T) = Current Account Balance
100 – 50 – 30 = 20

S↑ → Current Account Balance Improves

S↓ → Current Account Balance Deteriorates

50