Turkey's January budget produced a surplus of 1 billion Turkish Liras ($630 million) after a deficit a year earlier as faster-than-expected growth boosted tax revenue, the Finance Ministry said Tuesday.
The surplus compared with a deficit of 3.1 billion liras in January 2010. Excluding interest payments on debt, the budget produced a surplus of 4.8 billion liras, compared with a surplus of 3 billion liras a year earlier, Hurriyet Daily News reported according Bloomberg.
The government is aiming for a deficit of 33.5 billion liras this year, or about 2.8 percent of gross domestic product, after outperforming its budget goals in 2010.
It was the second January surplus in 21 years, Finance Minister Mehmet Şimşek said in statement after the figures were announced. The figures "demonstrate just how tight our policy is," Şimşek said.
Tax revenue rose 14 percent to 19.8 billion liras in January from a year earlier. Non-interest spending gained 13 percent while interest spending fell 38 percent.
In another development Tuesday, the Turkish Treasury sold inflation-linked bonds at lower yields as it exceeded its February borrowing program, the largest scheduled until at least May.
The Treasury issued a nominal 1.89 billion liras ($1.2 billion) of the 2021 bonds at an average 2.84 percentage point yield above the consumer price index. It last sold 3.3 billion liras of the debt at a yield of 2.86 percentage points above the index on Jan. 19.
"This was a successful auction and the Treasury wasn't expected to sell much because it completed this month's borrowing," Murat Yardımcı, head of trading at ING Bank in Istanbul, said by telephone. "We will see more of these CPI linkers in the coming period as buying CPI linkers means hedging your fixed-rate paper."
Demand for CPI linkers surged last year as investors sought protection from accelerating inflation.