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Turkey’s 2026 Budget Passes Critical Milestone Amid “Fiscal Collapse” Warnings from Opposition

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The Turkish Grand National Assembly (TBMM) has concluded deliberations on the 2026 Central Government Budget. While the government pledges continued support for SMEs, the opposition has sounded the alarm over a massive 2.7 trillion lira deficit and skyrocketing interest expenses.

ANKARA – As Turkey grapples with long-term inflationary pressures, the 2026 Federal Budget has moved toward final approval following a series of heated sessions in Parliament. The budget reveals a government struggling to balance ambitious industrial goals against a widening fiscal gap and a heavy debt-servicing burden.

The Fiscal Magnitude: A 2.7 Trillion Lira Gap

The 2026 budget paints a picture of significant fiscal expansion, but critics warn the math signals an “economic fire.” According to figures debated in the General Assembly:

  • Total Expenditures: 18.928 Trillion TRY

  • Total Revenues: 16.216 Trillion TRY

  • Budget Deficit: 2.712 Trillion TRY

  • Interest Payments: 2.741 Trillion TRY (A 40.6% year-on-year increase)

Opposition lawmakers, led by IYI Party’s Yasin Öztürk, highlighted that the interest payments alone now exceed the total budget deficit. “We are borrowing at interest just to pay off interest,” Öztürk stated, labeling the 2026 outlook as a “table of bankruptcy.”

“Governance by Decree” Under Fire

The debate also centered on the erosion of parliamentary oversight. The opposition accused the Executive Branch of bypassing the TBMM in the budget’s creation. “There is a budget before us, but no political accountability,” Öztürk argued, questioning why the Presidency did not personally present the figures to the assembly.

Regional Risks: Earthquakes and Social Unrest

Beyond the numbers, lawmakers raised concerns regarding Turkey’s structural vulnerabilities:

  • Seismic Preparedness: Mehmet Atmaca (New Road Party) warned that the government has failed to utilize its tenure to secure cities against predicted earthquakes, stating that the “moral responsibility for future losses” lies with the current administration.

  • Social & Democratic Crisis: DEM Party representative Kamuran Tanhan linked the deepening poverty to the lack of a “peaceful resolution” to regional social issues, while CHP’s Evrim Karakoz accused the government of ignoring ECHR and Constitutional Court rulings.

 

November Budget Performance Sends Positive Signals, but Interest Costs Remain the Key Risk

Government Response: Industrial Resilience and Digitalization

Defending the budget, Minister of Industry and Technology Mehmet Fatih Kacır emphasized the government’s role as a shield for the private sector. Kacır noted that the number of taxpayers served by the Digital Tax Office has reached 208 service categories, with over 18.5 million digital applications processed this year.

Kacır also announced a new educational initiative: the establishment of Science and Technology Colleges across Organized Industrial Zones (OSBs) to meet the demand for skilled labor. He reaffirmed that treasury-backed loans for tradespeople have reached 289 billion TRY, with the state continuing to subsidize 50% of the interest rates.

What’s Next?

The TBMM has now moved to discuss the 2024 Final Accounts Law. With the 2026 budget framework set, the focus shifts to how the Turkish Treasury will finance the 2.7 trillion lira deficit in an environment of high global interest rates.

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