Mr. Hakan ÖZYILDIZ Deputy Undersecretary of Treasury.
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Transcript of Mr. Hakan ÖZYILDIZ Deputy Undersecretary of Treasury.
Mr. Mr. Hakan ÖZYILDIZHakan ÖZYILDIZ
Deputy Deputy Undersecretary of TreasuryUndersecretary of Treasury
25,0%
52,5%
35,0%39,0%
68,5%
29,7%
15%
30%
45%
61%
76%
00 01 02
End year CPI
Target
20% 39% 33%38%52% 46%
79%
92%
58%
15%25%35%45%55%65%75%85%95%
2000 2001 2002 (*)
External Debt Net Domestic Debt Total Net Debt(*) Provisional
64.2%
70.0%
30%
45%
60%
76%
2002
Projection
Realization
TL Borrowing
Improved capital structure in private banksIncreased resilience of the financial system
Financial restructuring of state banks completedNo overnight borrowingExtremely high CARs
Strong budget consistent with primary surplus target of 6.5 %of GNP
Declining debt to GNP ratio
Increased resilience thanks to floating exchange rate regime
Primary Surplus: 2.5 % of GNP short of target
Weaker than expected revenues Expenditure overruns due to early elections
Efforts concentrated on improving fiscal stance in 2003
Revenues Tax Revenues Non-Interest RevenuesExpenditures Non-Interest Expenditures Personnel Other Current Investments Non-Interest Transfers Social SecurityPrimary Surplus*
28.4 24.2 2.940.922.5 8.3 2.5 2.1 9.5 4.2 5.3
(% GNP)
28.1 22.0 4.042.623.4 8.5 2.7 2.5 9.7 4.1 3.2
2002E 2003P
E: Expectation P: Program* IMF Definition
Appropriate recording of investment expenditures in the budget
Ambitious targets and conservative assumptions Substantial adjustment efforts Conservative assumptions on the yield of the measures
Inclusion of in-kind credits in the primary surplus also implies a further adjustment in the order of 0.5% of GNP
Increased transparency Budgetary discipline
Revenue enhancing measures (1.86 % of GNP) Raise property and motor vehicle taxes Increase the clawback on revolving fund revenues Raise revenue through disposition of state property Eliminate lags in corporate income tax collection Improve revenue collections in social security institutions Improve collection of tax arrears through Tax Peace Plan
Expenditure reducing measures (2.53 % of GNP) Limit current expenditures Limit the real growth of health expenditures by preventing misuse Contain the growth of personnel expenses Rationalize the investment program Limit hiring to 35,000 in public employment
In order to keep the program on track and to ensure a smooth rollover of public debt, central government budgetary appropriations for discretionary spending, excluding defense expenditures, will be blocked.
Annual savings of at least 1.2 % of GNP
-2.0
2.3
5.9
3.9
6.5
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
11.0
1999 2000 2001 2002 2003E
7,7
1,2
6.5
Primary Balance (% of GNP)
20%39% 33%38%
52% 46%
79%
92%
58%
15%
25%
35%
45%
55%
65%
75%
85%
95%
2000 2001 2002 (*)
External Debt Net Domestic Debt Total Net Debt(*) Provisional
USD billionUSD billion
Domestic-MarketDomestic-Market 46.446.4
Domestic-StateDomestic-State 43.043.0
Foreign Market 29.8Foreign Market 29.8
External-MarketExternal-Market 23.723.7
External – OtherExternal – Other 6.16.1
External-OfficialExternal-Official 13.413.4
IMF Credit IMF Credit 19.719.7
TOTAL 152.3TOTAL 152.3
USD billionUSD billion
Domestic-MarketDomestic-Market 46.446.4
Domestic-StateDomestic-State 43.043.0
Foreign Market 29.8Foreign Market 29.8
External-MarketExternal-Market 23.723.7
External – OtherExternal – Other 6.16.1
External-OfficialExternal-Official 13.413.4
IMF Credit IMF Credit 19.719.7
TOTAL 152.3TOTAL 152.3
As of March 2003 (prov.)
IMF Credit13%
Int.Institutions
9%
Foreign Market
20%
Public Sector28%
DomesticMarket30%
DOMESTIC DEBT COMPOSITION
NON BANK
As of March 2003 (prov.)
MARKET HOLDING OFDOMESTIC DEBT PUBLIC
51%
MARKET
49%
36%REAL
PERSONS60%
4%
LEGAL ENTITIES
RESIDENTS AND NON RESIDENTS
6%
46%48%
SEC.MUTUAL FUNDS
BANK PORTFOLIO NON BANK
Floating Floating RateRate4242%%
Floating Floating RateRate4242%%
FX FX Linked /Linked /
Den.Den. 3030%%
FX FX Linked /Linked /
Den.Den. 3030%%
Fixed Fixed RateRate%%2828
Fixed Fixed RateRate%%2828
Quadrillion TLQuadrillion TL Bil. USDBil. USDFixed RateFixed Rate 44.7 26.244.7 26.2Floating Rate 67.9 39.8Floating Rate 67.9 39.8FX Linked/Den. 49.9 29.2FX Linked/Den. 49.9 29.2Total Total 1162.5 95.262.5 95.2
Quadrillion TLQuadrillion TL Bil. USDBil. USDFixed RateFixed Rate 44.7 26.244.7 26.2Floating Rate 67.9 39.8Floating Rate 67.9 39.8FX Linked/Den. 49.9 29.2FX Linked/Den. 49.9 29.2Total Total 1162.5 95.262.5 95.2
As of March 2003 (prov.)
87%
40%
13%
60%
10%
90%
0%
20%
40%
60%
80%
100%
Fixed Rate Floating Rate FX Linked /Denominated
PUBLIC MARKET
As of March 2003 (prov.)
(Billion USD) 2002Jan-March April-Dec. Total
Total Debt Service 89.2 20.9 69.5 90.4 Domestic Debt Service 79.6 17.8 61.1 78.9
Principal 52.4 10.3 40.5 50.7 Interest (*) 27.2 7.6 20.6 28.2
Domestic Debt Service 79.6 17.8 61.1 78.9 To the Market 51.4 12.6 40.6 53.2 To the Public Sector 28.2 5.2 20.5 25.7 External Debt Service 9.6 3.1 8.4 11.5 Principal 6.2 2.0 5.3 7.3 Interest 3.4 1.1 3.1 4.2
Financing 89.2 20.9 69.5 90.4Domestic Borrowing 63.4 17.5 49.7 67.2
Borrowing from the Market 55.3 14.4 39.4 53.7 Borrowing from the Public Sector 8.1 3.1 10.4 13.5
Other Financing 25.8 3.5 19.7 23.2 Primary Surplus 9.4 1.3 10.5 11.8 Privatization 0.0 0.0 0.7 0.7 International Institutions (**) 13.2 0.0 3.9 3.9 External Borrowing 3.5 1.6 4.6 6.2 Use of Cash Account -0.3 0.5 0.1 0.6
Total Roll-over Ratio 81% 98% 82% 85%Market Roll-over Ratio (***) 101% 98% 86% 89%
* Interest payments are cash based. Accrued payments of switching and buy-backs are not included.** International Instutions includes IMF and World Bank credits.*** Market roll-over ratio calculations include total payments to the Public Banks.
2003 Program
83.0
98.098.0
76.4 76.5
60.0
70.0
80.0
90.0
100.0
110.0
2003 Q1 2003 Q2 2003 Q3 2003 Q4
(%)
PS 25.1 Quad. TRL PS 21.1 Quad. TRL
Interest & Growth Based Scenarios
58
92
79
7572
6864
60
73
50
45 %
55 %
65 %
75 %
85 %
95 %
2000 2001 2002 2003 2004 2005 2006 2007
Base Case: Growth=5%, Interest=45%
Growth=-1, Interest=+5
Growth=+1, Interest=-5
Public Net Debt / GNP