Single-figure target

Had there been no amendments, preparations for the Medium-Term Programme that was expected to be renamed would have been approved next week. Minister of Treasury and Finance, Berat Albayrak, recently announced reducing inflation to single figures as being one of the prior targets.

The Turkish lira’s depreciation against the US dollar yesterday alone shows that this is no easy target. The depreciation increased in the hours following the as yet undenied resignation by Central Bank Deputy Governor and Monetary Policy Board member Erkan Kilimci. It is a secret known to everyone that there exists a Central Bank under severe psychological pressure, even if Albayrak has said that he speaks about it cautiously due to it being “independent.” Moreover, it is not only the Central Bank that is under pressure. Items of expenditure in the budget which are trending ever upwards are also under severe pressure. However much all ministries were instructed at the beginning of this month to reduce their expenditure by 30%, it is doubtful whether this instruction will manifest itself as a budget surplus in the year-end figures.

 Enigmatic “other” item

Let us turn to examples:

-Entertainment and hospitality expenditure, starting at 2 million lira in January, reached 23 million lira in July and amounted to 101.5 million lira in the January-July period. The “initial payment” devoted to entertainment and hospitality expenses in the 2018 budget was pencilled in at 217.8 million lira. Let us see if the entertainment expenses of the state governed by the AKP will fall as per target to 116.3 million lira in the remaining five months of the year.

-Let me pass on another example from the “aircraft hire” item. Over seven months (the January-July period), 110.4 million lira was spent from the budget on hiring aircraft. The payments of 45 million lira made last month (July) were seven million lira more than in the same period last year. Let us see if there is a decline in expenditure on aircraft hire in the rest of the year.

-One item beneath the budget’s “service procurement” general heading has witnessed the fastest and most conspicuous increase of recent years: expenditure made in the January-July period under this item titled “Payments to other consultant companies and persons” amounted to a total of 6.73 billion lira.

 PPC invoices

In quoting these examples that I have selected from tables in the public domain, I am not even counting the bridge, tunnel, airport and city hospital payments made to the private sector under the Public-Private Cooperation model, guaranteed in foreign currency.

Let us recall in passing that, pursuant to the contract made with İGA AŞ for the third airport set to open on 29 October, a service fee of twenty euro will be received for each foreign passenger and the amount calculated on the basis of passenger lists will be paid by the General Directorate of State Airports Authority. Moreover, it has been announced that certain services at Istanbul Atatürk Airport operated by TAV will remain open for a while longer. We can predict that these services will not be gifted to the Treasury.

It can also be predicted that “jihadists’ wages,” an item probably covered out of secret funds, will be an item of expenditure that creates uncertainty as far as the 2019 budget is concerned.

Increased costs attributable to the import of energy used in manufacturing make it hard to achieve precision in the targets of the shortly-to-be-announced Medium-Term Programme. In the face of reality, it is unfeasible to draw up and implement a “budget focused on reducing inflation”

Leaving to one side all these examples and facts, this article you are reading could even have consisted of a single sentence:

With the number of palaces, mansions and imperial tents increasing, it becomes hard to stay in one place while tackling inflation.

 Tek hane hedefi