The COVID-19 pandemic has changed many people’s view of government budgets, with the focus shifting from deficits to cushioning the fallout of the pandemic.

Amid rising public needs for healthcare and economic support, many governments have put the emphasis on social well-being, braving larger budget deficits. Yet, others, like the Turkish government, have been tightfisted, keeping deficits in check but forcing millions of citizens into debt.

The Turkish parliament is now debating the government’s draft budget for 2022, which reflects an ongoing stinginess on the part of Ankara, although the pandemic is far from over and many people still need state support. Moreover, funds allocated to interest payments outstrip the planned spending on education and healthcare, while funds allocated to the military and the police remain uncut.

The draft budget is expected to easily pass parliament, where President Recep Tayyip Erdogan’s Justice and Development Party and its de facto ally, the Nationalist Movement Party, hold a comfortable majority.

The draft envisages a budget deficit of 3.5% of gross domestic product (GDP) next year. The budget deficit-to-GDP ratio stood at 2.9% in 2019 and 3.9% in 2020, and is projected to be 3.6% this year. This is in sharp contrast to advanced-economy countries, whose ratio averaged 7.4% last year, up from 3.2% in 2019, and is projected at 7% this year amid increased spending on healthcare and welfare support due to the pandemic. The public debt-to-GDP ratio of those countries rose as well, reaching 122% from about 103% before the pandemic. Many of Turkey’s emerging-economy peers increased social spending as well, braving larger budget deficits.


Written by Mustafa Sönmez