Turkey: 2020 budget to ‘scythe’ inefficient expenditure

Turkey has set various targets for its budget next year, prioritizing agriculture, education and health, as well as transparent and balanced financial policies.

According to the targets set by budget discussions, government projects related to the economy, technology, agriculture and infrastructure will continue, with new ones to be launched in 2020.

Fiscal projections

The Treasury and Finance Ministry will focus in the coming year on lowering inflation as well as interest rates and improve expectations and financial conditions to increase domestic demand for economic growth.

In addition, measures are also planned to improve productivity and support innovative products in the industrial sector, with policies also aiming to increase exports and tourism revenues.

After reviewing expenditures the ministry will eliminate inefficient spending areas, with the freed financial resources to be used in areas that would contribute to sustainable growth, particularly in education, health and high added-value production.

In line with the government's New Economy Program released last September, growth is expected to be 5%, unemployment 11.8%, exports $190 billion and imports $231.5 billion, as of 2020.

With the improvement in domestic demand, the current account balance next year is expected to keep external financing needs at low levels, with the rate of the current account balance to national income expected to stand at -1.2%.

Under the coordination of monetary and fiscal policies, the ministry will implement structural measures to increase competitiveness and productivity as well as to permanently reduce inflation to single-digit levels, expected to fall to 8.5% next year.

With the advent of e-invoices in public payments, all public bodies within the central government will be included in the e-invoice system by the end of 2020.

Industrial and technological objectives

The Industry and Technology ministry will continue to work on indigenous, high value-added production.

It aims to raise the share of medium and high technologies in the country's manufacturing industry exports to 50%.

Investments in research and development, innovation and entrepreneurship will continue through 2020.

The ministry also hopes to introduce the country's indigenous automobile, designed by Turkey's Automobile Initiative, upon its completion.

Turkey will establish model plants in some cities in order to support small and medium enterprises' technologic development and innovative capacity.

12 new industrial areas will be built in 2020 to generate 25,000 new jobs.

Turkey's Scientific and Technological Research Council (TUBITAK) will produce an indigenous microprocessor, named CAKIL, which will be especially used in the defense industry.

TUBITAK will also establish an artificial intelligence institute in 2020 to help the country become a greater global actor in the sector.

The country will also announce the 2020 National Space Program for its space agency, established last year.

Trade targets

In a bid to diversify the destinations of Turkey's exports, the Ministry of Trade will conduct market research through the year.

By creating an export system based on artificial intelligence, the ministry aims to provide detailed information to exporters.

Another of its targets is to complete free trade agreement (FTA) negotiations with Japan, as well as sign and expand preferential trade arrangements with some countries such as Azerbaijan, Uzbekistan, Iran and Mauritania.

It will focus on preserving market advantages in the U.K., which is set to leave the EU, by signing an FTA with the country.

Turkey will also ease various trade regulations including customs operations, e-commerce standards and check transactions in 2020, and continue efforts to update its customs union with the EU.

Agricultural plans

The Agriculture and Forestry Ministry will support a total of 4.1 billion Turkish liras ($712 million) worth of investments, which will generate 16,000 new jobs, under its Rural Development Support Program.

The market size of the seed sector will be expanded to $1.4 billion next year, while over half the ministry's budget will be allocated to agricultural incentives.

Turkey will also continue to support the livestock sector, aiming to raise the number of ovine to 56 million in 2020.

Europe and Turkey will establish their first specialized organized agriculture-based aquaculture zone with a capacity of 16,500 tons, and Turkish salmon production will increase from 9,000 to 30,000 tons.

Next year, the ministry will promote research and development, especially for the second prototype of the electric tractor.

Transportation and communication map

The Ministry of Transportation and Infrastructure will fast-track efforts to build the country's 5G communications network and make Turkey a leading country in this area.

The ministry also aims to launch the TURKSAT 5A satellite into space next year, in order to improve satellite communication capacity.

The country will continue to build intelligent transport infrastructure, pushing as well to complete Canal Istanbul -- a man-made waterway west of Istanbul to connect the Black and Marmara seas. It is one of Turkey's most strategic mega projects due to the increased risk of ships carrying dangerous goods in the Bosphorus.

Some 44,000 ships use the Bosphorus annually and, potentially threatening historic fabric, safety, properties and environment.

The budget for 2020 will be the 18th of the ruling Justice and Development (AK) Party government and the second since the country recently instituted the presidential system of governance in June 2018.

Source: Anadolu Agency