VKF_FRAE_2017

PART I: INTRODUCTION 42 VakıfBank Annual Report 2017 Central government gross debt stock maintained lower than Maastricht Criteria. THE WORLD AND TURKEY IN 2017 Budget revenues increased from TL 554 billion in 2016 to TL 630 billion in 2017. »» CENTRAL GOVERNMENT BUDGET DEFICIT CAME IN AT TL 47.4 BILLION IN 2017. The central government deficit, which stood at TL 29.9 billion in 2016, materialized as TL 47.4 billion in 2017. Budget revenues rose 13.8% year-on-year from TL 554 billion 140 million in 2016 to TL 630 billion 349 million in 2017. On the other hand, budget spending went up by 16% year-on-year from TL 584 billion 71 million in 2016 to TL 677 billion 722 million in the same period of 2017. The ratio of the central budget deficit to GDP, which stood at 1.1% in 2016 is expected to reach 1.5% in 2017 and 1.9% in 2018 according to the Medium Term Program (2018-2020). On the other hand, in 2017, the primary surplus decreased by 54% over the previous year to reach TL 9 billion 34 million. It is expected that the primary surplus, which is important in terms of debt management, will stand at TL 5.8 billion in 2018. »» CENTRAL GOVERNMENT GROSS DEBT STOCK ROSE IN 2017, BUT NONETHELESS REMAINED BELOW THE MAASTRICHT CRITERIA. The central government gross debt stock increased from TL 760 billion in 2016 to TL 876.5 billion in 2017. TL 535.4 billion was in the form of local currency debt and TL 341 billion in foreign currency denominated debt. Within the framework of the Maastricht Criteria, also referred as the “EU’s Financial Rule,” the debt stock to GDP ratio has been declining steadily, particularly since 2009. However, the increase in economic incentives in 2017 expanded the budget deficit, which in turn boosted domestic borrowing by the Treasury. As a result, the debt stock to GDP ratio may rise. On the other hand, the said rate will nonetheless remain below the Maastricht criterion of 60%. CENTRAL GOVERNMENT GROSS DEBT STOCK (% GDP) Source: Undersecretariat of Treasury 25 35 45 55 65 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Maastricht Criteria (60%) 54.9 49.3 43.8 37.9 38.3 44.2 40.9 37.2 33.9 32.4 30.0 29.1 29.0