The Turkish government expected the budget deficit in 2018 to reach $17.3 billion. Turkey’s parliament has approved on Saturday the government’s 2018 budget, which includes increased spending on defense and projects a rise in the fiscal deficit to 65.9 billion lira ($17.28 billion).
The 2018 budget includes changes in tax regulations, including tax increases for companies and motor vehicles, to help pay for increased security.
The government announced a 40 percent increase on motor vehicles taxes in September to divert the proceeds to the defense and security budget, but then dropped it to 25 percent after wide-range public objections.
Turkey's budget deficit for the current year is expected to hit $16.5 billion, nearly twice the 2016 budget deficit of about $8.5 billion.
Turkey’s 2018 budget also projects tax income of 599.4 billion lira, up some 15 percent from estimates for 2017.
Over the past two years, Turkey’s current account deficit has widened due to increasing government incentives to boost the economy and defense spending. Next year’s budget deficit to gross domestic product ratio is expected to be 1.9 percent.
Turkey's trade deficit rose 85.23 percent year-on-year in September to $8.14 billion.
The government says the additional defense spending is urgently needed to modernize the military, the second-largest in the NATO alliance, and meet the costs of domestic and foreign security operations.
Turkey’s economy has recovered from a downturn that followed an attempted coup last year, helped by a series of government stimulus measures.
GDP grew 11.1 percent year-on-year in the third quarter, its fastest expansion in six years, according to official data.