Credit rating agency Fitch stated that the budget of local governments in Turkiye is resistant to inflation and earthquakes.
In a statement made by Fitch, it was reported that Turkiye’s national and local government (LRG) budget outputs are resistant to high inflation in 2022 and can absorb the financial impact of the earthquakes in February.
In the statement, it was stated that the budget outlook for 2022 of the 9 metropolitan municipalities (Ankara, Istanbul, Izmir, Adana, Bursa, Konya, Manisa, Mersin, Mugla) evaluated by the credit rating agency is better than expected.
In the statement, it was stated that the budget balance of 9 metropolitan municipalities was recorded as 42% despite the expectation of 39% last year, and it was recorded that the average debt-operation balance was 1.4 times, despite the expectation of 1.6 times.
“As required by law, the central government will cover most of the extra expenditures due to earthquakes. We expect the impact on the budgets of metropolitan municipalities to be limited to the supply of vehicles and equipment to support the affected areas. To reflect this, we foresee a 5% increase (contribution from the budget) for medium-sized metropolitan municipalities and 10 percent for larger ones.” the statement said.
Source: Trthaber / Prepared by Irem Yildiz