The figures in the 2021 budget are worrying as they show that it has become almost impossible to meet public expenditures which have been in shortfall for some time, the Turkish Cypriot Chamber of Commerce (KTTO) has stated.
Considering that the economic impact of the pandemic will continue in 2021 and that economic support will be important for the economy to recover again, the Chamber asked for the support for the private sector to be increased during the pandemic.
In a press release, which included the evaluations of the 2021 budget by KTTO, it was stated that the chronic financial problems of the country once again came onto the agenda with the budget negotiations.
The statement noted that the 2021 budget was prepared with a projection of 10.140 billion TL expenditure, there was a local deficit of 1.8 billion TL.
“The 2021 budget is mainly based on Turkish Republic aid and credits, which constitute approximately 25% of the budget”, the KTTO statement said.
“… The fact that the expense side of the TRNC budget consists mainly of personnel expenditures continues to affect spending flexibility negatively. As a matter of fact, it is not possible to reduce these expenditures even during the time of the pandemic, which is creating economic difficulties. Overtime, payments continue to be unsustainable in terms of public finances”.
The statement went on to say that insufficient resources were allocated for support during the epidemic crisis, 80 million TL was allocated for the Coronavirus Fighting Project, and 20 million TL was allocated for the Tourism Outbreak Support Programme Project, financed by Turkish resources.
The Turkish Cypriot Chamber of Commerce called on the government and parliament to “work in line with the realities, to handle the 2021 budget with a realistic attitude and to make serious reforms in public finance“. The chamber also stated that it was ready to make any contribution in this regard.