Impacts and Results of the Global Financial Crisis on Turkey’s Central Administration Budgets in 2008–2010

Abstract

Together with the global financial crisis, the increased economic uncertainty in Turkey is seen to have negatively affected trust and forward-planning. During the global crisis, Turkey's economy contracted and its national budget was negatively affected. Due to the overall decline in growth, tax reductions were enacted to support the real sector, which in turn decreased public revenues and quickly increased the administration's budget deficit. To reduce the effects of the crisis, some areas of spending were increased, as well. As a result of these developments, the budget deficit and treasury debt load ratio increased past the previously projected levels.