Turkey's Budget Deficit After the Earthquakes

The Turkish central government recorded a deficit of 47.22 billion lira ($2.46 billion) in March, while the cumulative deficit for 2023 rose to 250 billion lira due to the devastating earthquakes that struck the country, according to the Turkish Ministry of Finance. The ministry added that the primary budget, which does not include interest payments, showed a deficit of 2.15 billion lira in March, bringing the total deficit for the first three months of the year to 149.37 billion lira. The deficit in the central government budget during February was 170.56 billion lira, leading to a cumulative figure of 202.8 billion lira for the first two months of the year. Rising inflation, which reached 50.5 percent in March, has eroded household savings and impacted Erdogan's popularity, while the earthquakes have exacerbated the challenges faced by the Turkish president in his bid for reelection in the May 14 elections. The government implemented numerous measures to mitigate the earthquakes' effects on the economy, such as deferring debt repayments and providing wages and financial assistance to earthquake victims, which also contributed to the budget deficit increase. The economic cost of the earthquakes, which claimed the lives of over 50,000 people in Turkey, is estimated at around $104 billion. It is expected to reduce economic growth this year by one to two percentage points.