Economic fallout of pandemic shown in report

THE TRNC’s public finances were more than 200 million TL in the red during the first three months of 2021, according to the Central

Bank’s latest quarterly bulletin.

According to the bulletin, 1,614.6 million TL went into the state coffers while

1,843.8 million TL came out in January, February and March – a deficit of 229.2 million TL.

The economic fallout of the Covid-19 pandemic, which hit North Cyprus in March 2020, was laid bare in the report. It showed that tax revenues were down by 8.6 percent to 976.2 million TL compared to the same period for the previous year.

Non-tax receivables, the second highest share of budget revenue, were down from 544 million TL in the first quarter of 2020 to 488.4 million TL in the first quarter of 2021.

The first two items with the largest share in budget expenditures in the first quarter of 2021 were “current transfers” and “personnel expenses”, amounting to 805 million TL and 708.1 million TL respectively.

In addition to “grants, aid and loans to be received from Turkey”, the bulletin stated that the 2021 Fiscal Year Budget Law is expected to meet government spending by creating 830 million TL “net internal resources”.

However, in the first quarter of this year, the report noted the Finance Ministry had already used “approximately half of the net domestic borrowing amount that was forecast for the whole year” leaving a “net borrowing facility of 419 million TL for the remaining three quarters”.

The bulletin also included figures on inflation. Monthly inflation rates for January, February and March were 0.48 percent, 0.02 percent and 1.39 percent respectively.

Annual inflation compared to the same month of the previous year stood at 13.65 percent in January, 12.93 percent in February and 13.97 percent in March.

At the end of March 2021, the sectors with the highest annual price increase were furniture and household appliances, up by 34.87 percent, health (21.39 percent) and transportation (18.29 percent).

Data from the Trade Department showed that exports were up by 22.6 percent in 2020 compared to 2019, while imports were down by 23.1 percent for the same period.

However the value of imports to the TRNC was still around 12 times greater than exports. Imports in 2020 were worth $1,220.6 million while exports had a total value of $101.1 million.