[REVISION HISTORY]

Turkey 2026 fiscal, debt, FX & external deficits

Updated 5 times since CLSTR started tracking revisions of this situation.

What changed

2026-08-18 12:49 UTC → 2026-09-15 09:21 UTC · added ~~removed~~

In May 2026, the Treasury raised about 13.4 bn lira through domestic bond auctions and sold roughly $14 bn of U.S. Treasury holdings to shore up the lira. An internal borrowing programme for June–August was announced, targeting roughly 1.85 tn lira. The May budget showed a 298 bn lira deficit, while short-term external debt hit a record $171.6 bn. By the first half of 2026, a non-interest budget surplus of 521 bn lira was reported, though interest payments had already surged to 1.5 tn lira. Fiscal pressures intensified in August following a law passed by the Grand National Assembly that removes the 4% Treasury contribution to the Social Security Institution (SGK), effective August 2026. TEPAV Centre Director Hakkı Hakan Yılmaz warned that this could swing the SGK from a projected 200 bn lira surplus in 2026 to a 1.1 tn lira deficit, potentially raising the overall central budget deficit by roughly 1.23 tn lira. By late August, data for the first seven months of 2026 revealed a central government budget deficit of over 1.32 tn lira. While revenues rose 37.4% year-on-year to 9.2 tn lira, expenditures increased 36.6% to 10.52 tn lira. Interest costs remained a primary driver of fiscal strain, reaching 1.79 tn lira for the January–July period, a 43.7% increase from the previous year; in July alone, interest payments accounted for approximately 18% of total expenditures. Despite these pressures, Treasury and Finance Minister Mehmet Şimşek reported on August 17 that the country is maintaining fiscal discipline. He noted that the non-interest budget surplus reached 470 bn lira between January and July, an increase of 228 bn lira compared to the same period last year, and that the domestic debt rollover rate has been maintained at 87 percent.

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