Turkey's Budget Deficit for 2018 Expected to Reach 17.3 Billion Dollars

Turkey via AAWSAT arabic.
Turkey via AAWSAT arabic.
TT

Turkey's Budget Deficit for 2018 Expected to Reach 17.3 Billion Dollars

Turkey via AAWSAT arabic.
Turkey via AAWSAT arabic.

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.



Tel Aviv Shares Hit Record Highs after US Strikes Iran Nuclear Sites

A Tel Aviv Stock Exchange sign is seen at the bourse in Tel Aviv, Israel November 4, 2020. REUTERS/Amir Cohen/File Photo
A Tel Aviv Stock Exchange sign is seen at the bourse in Tel Aviv, Israel November 4, 2020. REUTERS/Amir Cohen/File Photo
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Tel Aviv Shares Hit Record Highs after US Strikes Iran Nuclear Sites

A Tel Aviv Stock Exchange sign is seen at the bourse in Tel Aviv, Israel November 4, 2020. REUTERS/Amir Cohen/File Photo
A Tel Aviv Stock Exchange sign is seen at the bourse in Tel Aviv, Israel November 4, 2020. REUTERS/Amir Cohen/File Photo

Israeli stocks hit record highs on Sunday after the US attacked Iran's nuclear sites in strikes investors believe would likely prevent Tehran from developing nuclear weapons anytime soon.

The broad Tel Aviv 125 index closed 1.8% higher, extending gains to nearly 8% the past week, while the blue-chip TA-35 gained 1.5%.

On the heels of Israeli strikes in Iran, shares rose during all five sessions last week, gaining some 6%, as Israel hit Iranian nuclear and military targets prior to Saturday's surprise US attacks, Reuters reported.

"The destruction of Iran's key nuclear facilities by the US military is, of course, a positive development ... in terms of improving the regional security environment and reducing Iran’s military and nuclear capabilities," said Mizrahi Tefahot chief markets economist Ronen Menachem. "It's a game-changer."

Israel began its punishing attacks on Iranian nuclear facilities, ballistic missile factories and military commanders on June 13, which have been met with retaliatory Iranian strikes against Israel.

US President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes overnight with massive bunker busting bombs, joining an Israeli assault in a significant new escalation of conflict in the Middle East.

Tehran vowed to defend itself, and responded with a volley of missiles at Israel that wounded scores of people and destroyed buildings in Tel Aviv on Sunday.

In addition to gains in shares, government bond prices have risen, the shekel has appreciated and Israel's risk premium has edged lower.

Bond prices increased as much as 0.2% on Sunday. The shekel does not trade on Sunday but it has rallied from 3.61 per dollar on June 11 to 3.48 on Friday and is up some 1% this month.