Mahmut Esen, Chief Inspector of Civil Administration, has written a tremendous analysis, as usual, by comparing the income/expenditure and balancing issues in the 2026 Central Government Budget Law with the budget figures of the previous year and the 11-month realizations.
I would like to sincerely thank Mr. Mahmut for sharing his analysis with me, and I think it is an analysis that should be read by the entire world of economics, politics and academia.
I believe that both the ruling and opposition parties should read it because it is a highly academic analysis for both sides, based entirely on data, far from polemics and politics.
Here is Mahmut Esen's analysis...
The Central Government Budget Law Proposal for the Year 2026, which was prepared in accordance with the policies, targets and priorities set out in the Medium Term Program (2026-2028) and the special legislation, was adopted without any change except for the increase of TL 50 billion in the revenue and expenditure budget estimates by Law No. 7567 dated 21.12.2025 following the negotiations held by the Turkish Grand National Assembly.
In terms of identifying the problems of the country and the nation and the measures to be taken, it is of particular importance to know the current situation of public finance, which covers the collection of public revenues, the realization of expenditures, the financing of deficits, and the management of public assets, debts and other liabilities, and to monitor developments closely.
In this context, central government budget laws, together with their proposals/justifications and annexes, contain important information of an up-to-date nature.
MACROECONOMIC INDICATORS (TARGETS) FOR 2025
As is known, Medium Term Programs (MTP), which are the basic documents for the preparation of central government budgets, contain information/documents such as macro policies, basic economic aggregates, revenues/expenditures for the next three years, budget balance, etc. regarding the national economy.
A table showing the realization status and realization forecasts of some of the macroeconomic indicators covering the period 2026-2028 and program targets, which were determined in the MTP prepared by the Ministry of Treasury and Finance and the Presidency of Strategy and Budget by taking into account the principles of the Twelfth Development Plan and approved by the President on 7.9.2025, is presented below.
2026 Merkezi Yönetim Bütçesi (MYB) gelir ve gider tahminleri sırasında; OVP uyarınca reel büyümenin %3,8, GSYH deflatörünün %19,7 ve yıl sonu TÜFE enflasyonu ise % 16 olarak baz alınmıştır.
The US Dollar exchange rate was accepted as TL 46.60 as an indicator.
Deviations from growth and inflation targets and changes in exchange rates directly affect the estimated budget size.
In examinations of some key indicators:
GDP (Current Prices)
The GDP, which was realized as TL 44.587 trillion in 2024, is estimated to be TL 62.179 trillion in 2025 (with a % increase of 39.5 percent) and is targeted to reach TL 77.257 trillion in 2026 (with a % increase of 24 percent).
-GDP growth, which was % 3.3 in 2024, is estimated to be % 3.3 in 2025 and is targeted to increase to % 3.8 in 2026.
Per Capita Income (GDP, USD)
The per capita income of USD 15,325 in 2024 is estimated to be USD 17,748 in 2025 (with an increase of % 15, 8) and is programmed to be USD 18,621 in 2026 (with an increase of % 5).
Foreign Trade (Billion Dollars)
Exports, which amounted to USD 261.8 billion in 2024, are estimated to reach USD 273.8 billion in 2025 (with an increase of % 4.5) and are expected to reach USD 282 billion in 2026 (with an increase of % 3).
Imports, which were 344 billion USD in 2024, are projected to rise to 367 billion USD in 2025 (with an increase of % 6) and 378 billion USD in 2026 (with an increase of % 3).
On the other hand, while record increases in exports are frequently brought to the agenda, record increases in imports are ignored.
However, it is known that export revenues do not cover import expenditures.
As a matter of fact, the foreign trade deficit, which was -82.2 billion USD in 2024, is estimated to rise to -93.2 billion USD in 2025, and the deficit is programmed to be -96 billion USD in 2026.
2024 yılında %76 seviyesinde gerçekleşen ihracat/ithalat oranının; 2025 yılında % 74 olarak gerçekleşeceği tahmin edilmiş, 2026 yılında ise % 74 seviyesinde olması hedeflenmiştir.
Current Account Balance (Billion Dollars)
In 2024, the current account balance posted a deficit of USD -10.2 billion, while the deficit in 2025 is estimated to reach USD -22.6 billion and the deficit in 2026 is programmed to be USD -22.3 billion.
The ratio of current account deficit to GDP, which was % -0.8 in 2024, is projected to increase to % -1.4 in 2025, and this ratio is programmed as % -1.3 in 2025.
2024 yılı sonunda %44,4 olarak gerçekleşmiş TÜFE’ nin; 2025 yılında %28,5 olarak gerçekleşeceği tahmin edilmiş, 2026 yılında ise % 16 ‘ya düşmesi programlanmıştır.
The unemployment rate, which was %8.7 in 2024, is estimated to be %8.5 in 2025 and is projected to fall to %8.4 in 2026.
Bütçe hazırlanmasında temel veri olmakla birlikte OVP yer alan tahmin/hedeflerde tutarsızlıklar ve çelişkiler olduğu, bu yüzden OVP’ların sıklıkla geniş kapsamlı revizyona tabi tutulduğu bilinmektedir. Bu yüzden 2026 yılı için belirlenmiş %16 enflasyon hedefinin de gerçekleşmesi zor görülmektedir.
2026 CENTRAL GOVERNMENT BUDGET LAW
Budget Expenses
An appropriation of TL 2.741 trillion for interest expenditures with an increase of % 40 and TL 4.907 trillion for personnel expenditures with an increase of % 41.2.
Budget revenues barely cover primary expenditures. The primary surplus is (only) around 29 billion TL.
Bir önceki yıla (başlangıç ödeneklerine göre) göre 2024 yılında % 168 artışla gerçekleşmiş personel giderlerinde 2025 yılında %36, 2026 yılı için de 41,2 oranında artış öngörülmüştür.
The table below shows the central government expenditure budget proposals for 2025 and 2026 by economic classification, the rates of increase compared to the previous year, and the shares of expenditure types in general expenditures.
2025 yılı Ocak- Kasım aylarını kapsayan gerçekleşme sonuçlarına göre faiz ve personel giderleri için ayrılmış ödeneklerin yetersiz kalacağı; buna karşılık diğer ödeneklerden sağlanacak tasarruflarla birlikte gider bütçesindeki gerçekleşmenin %100’ün -az da olsa- üzerinde oluşacağı anlaşılmaktadır.
In the allocation of 2026 total budget allocations by expenditure types, there is no significant change compared to the previous year, except for increases in personnel, interest and capital transfer expenditures and decreases in current transfers and capital expenditures.
Nitekim; önceki yılda olduğu gibi toplam giderler içinde en büyük payı % 36,3 oranı ile cari giderler almıştır. Bunu % 25,8 oranı ile personel giderleri izlemektedir. Faiz giderleri büyüklük itibarıyla %14,4 oranı üçüncü sırada yer almıştır. Faiz giderlerinin; sermaye giderleri ile mal/hizmet alım giderleri toplamından, personel giderlerinin yarısından bile fazla olduğu görülmektedir.
In the 2026 central government expenditure budget, according to the functional classification, the rates of increase in appropriations for health, public order and security, general public, and defense services are above average, while those for other types of services (social security and social assistance, environmental protection, economic affairs, housing and community welfare services) are below average.
There is no significant change in the distribution of total appropriations by services compared to the previous year.
Fonksiyonel sınıflandırma toplam ödeneklerin hizmetlere dağılımda en büyük payın %36,3 oranı ile genel kamu hizmetlerine ayrılmıştır. Genel kamu hizmetlerini %17,1 oranı ile sosyal güvenlik ve sosyal yardım hizmetleri, %12,3 oranı ile eğitim hizmetleri, %11,6 oranı ile ekonomik işler için ayrılmış ödenekler izlemektedir.
On the other hand, in accordance with the performance-based program budget implementation, 67 programs have been determined to be implemented in 2024 and the following years and appropriations have been allocated according to the programs.
The highest allocations were allocated to the programs for managing Treasury assets and liabilities (debt stock) with TL 3 trillion, social security with TL 1,872 trillion and strengthening local governments with TL 1,660 trillion.
Budget Revenues
2026 central government budget revenues were set at TL 16.266 trillion, an increase of % 27.7 compared to 2025 budget estimates.
Merkezi yönetim bütçe gelirlerinin 13,833 trilyon TL si ( %85) vergi gelirleri, 2,248 trilyon TL si ( % 13,8 ) vergi dışı gelirler, 184 milyar TL si (%1) de özel bütçeli kuruluşlar/ düzenleyici denetleyici kurum gelirleridir.
2026 yılı vergi gelirleri önceki yıla göre %24,1 artışla 13.833,1 trilyon TL tahmin edilmiştir. Vergi gelirleri bütçe gelirlerinin % 85’ni oluşturmaktadır.
In 2026, the rate of increase in general budget tax revenues is below the general average. Compared to the previous year, the share of tax revenues in the central government budget decreased. As a matter of fact, there is a net decrease in Corporate Tax and VAT on Imports. Except for Income Tax, VAT, Stamp Duty and Fees, increases in other revenues are estimated below the average rate of % 24.
Gelir Vergisindeki % 65, Harçlarda % 62’ ye ulaşan gelir artış oranları dikkat çekmektedir. Gelir Vergisinden elde edilen gelirlerin vergi gelirleri içindeki payının %31 oranında artışla %25 düzeyine ulaştığı görülmektedir.
Non-tax revenues are estimated at TL 2,248.6 trillion with an increase of % 46.6 compared to the previous year.
Genel bütçe vergi gelirleri içinde % 25 oranı ile Gelir Vergisi tahsilatı ilk sırada yer almaktadır. Gelir Vergisini; %18,3 oranı ile ÖTV, %15,1 oranı ile İthalde Alınan KDV; % 14 oranı ile Dahilde Alınan KDV gelirleri izlemektedir. Kurumlar Vergisinin payının ise bir önceki yıla göre % 25 azalma ile % 11,6 oranına gerilediği görülmektedir.
2024 yılındaki gerçekleşmelere göre Gelir Vergisinin %92’si stopaj suretiyle tahsil edilmiştir. Stopaj suretiyle yapılmış tahsilatın yaklaşık % 70’ini işçi ve memurlardan kaynağında yapılan kesintiler oluşturduğu tahmin edilmektedir.
For the aforementioned reasons, even if tax exemptions are applied to the minimum wage, it is understood that employees will pay more taxes in 2026, and the burden of inflation will remain largely on employees, as the adjustments in tax brackets are set below the inflation rate.
On the other hand, SCT and VAT revenues alone account for % 47’4 of total tax revenues.
The share of taxes on income/earnings and wealth in total revenues is low.
Therefore, the share of indirect taxes in tax revenues was realized as % 66.7 in 2024.
As is well known, indirect taxes are unfair and unjust since they are collected without discriminating between rich and poor, including “essential consumption items”. It is clear that the share of direct taxes in tax revenues should be increased in terms of social justice, income distribution and tax justice.
In 2026, 202.8 billion TL revenue is estimated from capital (asset) sales revenues. Of these revenues, 18.1 billion TL is expected to be collected from the sale of lodging, land, 9.7 billion TL from the sale of immovables within the scope of 2/B and 185 billion TL from other capital (share) sales revenues.
Budget Balance
As in other years, the central government budget for 2026 was not prepared as balanced, as expenditures exceeded revenues.
The estimated 2026 central government budget revenues cover only % 85.7 percent of budget expenditures.
Revenues can barely cover even the expenditures, excluding interest.
The 2026 budget was balanced with a net borrowing of -2.713 trillion TL.
Since revenues can barely cover the primary expenditures, the primary balance will not be able to turn into a surplus, which means that payments of debt principal will slow down and debts will increase rather than decrease.
(On the other hand, as of 31.11.2025, the central government has a total debt stock of TL 13,325 trillion, of which TL 7,941 trillion is domestic debt and TL 5,383 trillion is external debt. (https://www.hmb.gov.tr/kamu-finansmani-istatistikleri)