Turkey's budget deficit is widening in March following the earthquakes.

Following the devastating earthquakes that struck southern Turkey in February, the Turkish government is facing a sharp increase in its budget deficit. According to the Ministry of Finance, the total state budget deficit totaled 47.22 billion liras ($2.46 billion) in March and the cumulative deficit for 2023 increased to 250 billion liras, mainly due to the devastating earthquakes.

The primary balance, which excludes interest payments, also showed a deficit of 2.15 billion liras in March, leading to a total deficit of 149.37 billion liras in the first three months.

Inflation, which reached 50.5% in March, has significantly reduced household savings and President Tayyip Erdogan's popularity. The earthquakes have also only exacerbated the difficulties he faces as he prepares for re-election in the historic election scheduled for May 14.

To minimize the impact of the earthquakes on the economy, the government took a number of measures, including deferring debt payments and providing salaries and cash support to earthquake victims, which also increased the budget deficit.

Economists believe the government's spending on reconstruction and aid could increase the budget deficit-to-GDP ratio to more than 5% this year, up from Ankara's forecast of 3.5% last September.

In March, Tresor transferred 3 billion liras to transform disaster-prone areas after earthquakes devastated parts of 11 provinces in southern Turkey. A month earlier, a transfer of 5.6 billion liras was made.

Budget figures show that about 15.7 billion liras were allocated to families and businesses in March, up from more than 25 billion in February.

The economic cost from the quakes, which killed more than 50,000 people in Turkey, is estimated at about $104 billion and is expected to reduce economic growth by one to two percentage points this year.

According to the data, no payments were made in March to the state pipeline operator BOTAS and a government program that protects lira deposits from falling foreign exchange. Only 32 billion liras were transferred to BOTAS in the first two months of the year.