Turkey Budget Deficit Narrows in March

Turkey’s central government posted a budget deficit of TRY 298.2 billion in May 2026, compared with a surplus of TRY 235.2 billion a year earlier. Total spending rose 27.0% year-on-year to TRY 1.38 trillion, driven by increases in personnel costs (+48.1%), social security contributions (+52.6%), current transfers, capital expenditure, and goods and services purchases. Non-interest expenditures increased 28.3% to TRY 1.26 trillion, while interest payments rose 16.0% to TRY 128.9 billion. On the revenue side, inflows fell 18.0% to TRY 1.09 trillion, weighed by a 22.1% drop in tax receipts to TRY 931.5 billion, reflecting broad-based declines across key categories, including income tax, VAT, and special consumption tax, despite gains in banking and insurance taxes and customs-related revenues. As a result, the primary balance shifted to a deficit of TRY 169.3 billion from a surplus of TRY 346.4 billion a year earlier.

Turkey’s central government budget posted a deficit of TRY 338.7 billion in April 2026, almost doubling from TRY 174.7 billion a year earlier as expenditure growth outpaced revenues. Total spending rose 34.7% year-on-year to TRY 1.52 trillion, driven by increases in personnel costs, current transfers, capital expenditure, and goods and services purchases. Non-interest expenditures also climbed 45.4% to TRY 1.27 trillion, while interest payments slipped 1.2% to TRY 257.6 billion. On the revenue side, inflows increased 23.9% to TRY 1.19 trillion, supported by a 28.5% rise in tax receipts to TRY 1.01 trillion, boosted by gains in income tax, VAT (domestic and import), stamp duty, and banking and insurance transaction taxes. As a result, the primary balance shifted to a deficit of TRY 81.1 billion from a surplus of TRY 85.9 billion a year earlier, reflecting faster growth in non-interest spending relative to revenues.

Turkey’s central government budget deficit narrowed to TRY 229.9 billion in March 2026 from TRY 261.5 billion in the same month a year earlier. Budget revenues surged 60.6% year-on-year to TRY 1.23 trillion, supported by a 63.9% jump in tax collections to TRY 1.06 trillion, driven by strong increases in income tax, domestic VAT, VAT on imports, and special consumption tax receipts. Meanwhile, total expenditures rose 42.1% to TRY 1.46 trillion, led by higher current transfers, personnel spending, and interest payments. Non-interest expenditures increased 41.3% to TRY 1.22 trillion, while interest payments climbed 46.3% to TRY 236.0 billion, reflecting rising debt-servicing costs. Despite the deficit, the primary balance returned to a surplus of TRY 6.1 billion, compared with a deficit of TRY 100.2 billion a year earlier, supported by strong revenue growth outpacing non-interest spending.