Turkish gov’t debt rises sharply in February, driven by growing domestic burden

The Turkish central government’s gross debt stock reached ₺9.9 trillion ($272.2 billion) at the end of February, marking a 36.9% year-on-year increase, driven in part by a rise in domestic debt, Türkiye’s Treasury and Finance Ministry reported Thursday.

The gross debt stock includes the outstanding debt of public sector institutions, the central bank, private companies, and households.

In February 2025, Türkiye’s domestic debt stock rose significantly to ₺5.47 trillion, up from ₺3.44 trillion in the same month of the previous year—an increase of approximately 59%. This sharp rise reflects a heavier reliance on local borrowing to meet financing needs amid ongoing fiscal pressures.

Meanwhile, external debt stock grew more moderately, reaching ₺4.44 trillion compared to ₺3.8 trillion in February 2024, marking a 16.8% annual increase. The faster pace of domestic debt accumulation points to a growing reliance on local borrowing to meet rising lira-based spending needs, particularly those tied to domestic programs and budgetary obligations.

Some 45% of the debt stock is denominated in Türkiye’s local currency, while the rest is in foreign currency.

Fixed-rate debts lead the figures

The total debt stock with inflation-indexed instruments stood at ₺605.3 billion, while fixed-rate instruments made up the bulk at ₺6.78 trillion, significantly exceeding both floating-rate and inflation-indexed debt.

Meanwhile, the volume of foreign currency-denominated debt stock rose to ₺4.59 trillion from ₺3.68 trillion in the same month of the previous year, marking a 24.7% increase. However, its share in the gross debt stock dropped by 9 percentage points over the same period, falling from 64% to 55%.

The U.S. dollar/Turkish lira exchange rate was around 36.4 at the end of February.