Türkiye’s 2025 budget forecasts over $55B deficit
Vice President Cevdet Yilmaz at the 2025 Central Government Budget Binding Ceremony at the Presidential Complex, Ankara, Türkiye, Oct. 17, 2024 (AA Photo)
Türkiye’s Vice President Cevdet Yilmaz shared details of the 2025 budget, projecting a deficit of ₺1.9 trillion ($55.4 billion), equivalent to 3.1% of the country’s gross domestic product (GDP).
The budget estimates revenue at ₺12.8 trillion, while expenditures are forecasted to reach ₺14.7 trillion.
During the Central Government Budget Binding Ceremony, Yilmaz outlined the key budget figures, stating that in 2025, the government expects expenditures of ₺14.7 trillion and revenues of ₺12.8 trillion.
Tax revenue breakdown
Yilmaz also provided a breakdown of expected tax revenues for 2025:
- Income tax: ₺2.13 trillion
- Corporate tax: ₺1.64 trillion
- Special consumption Tax: ₺2.12 trillion
- Value added tax: ₺3.6 trillion
- Other tax revenues: ₺1.65 trillion
- Non-tax revenues: ₺1.66 trillion
₺584 billion for earthquake relief
Yilmaz highlighted the impact of earthquake-related spending on the 2023 budget, noting that the deficit reached 5.2% of GDP. Excluding these expenditures, the deficit would have been 1.6%.
For 2025, the budget allocates ₺584 billion for rebuilding and strengthening disaster resilience, including ₺120 billion for the Disaster-Resilient Cities Project, representing 0.9% of GDP.
The 2024 budget deficit is expected to reach 4.9% of GDP, driven by ongoing earthquake recovery costs. Excluding these expenses, the deficit is projected to be 2.5%.
Economic breakdown of expenditures
Yilmaz provided a detailed breakdown of the 2025 budget allocations:
- Personnel expenses: ₺3.91 trillion
- Goods and services procurement: ₺1.02 trillion
- Current transfers: ₺5.81 trillion
- Capital expenditures: ₺1.1 trillion
- Capital transfers: ₺338 billion
- Debt payments: ₺306 billion
- Contingency reserves: ₺287 billion
- Interest payments: ₺1.95 trillion
Education, health and social welfare spending
The education budget for 2025, including higher education, will increase to ₺2.18 trillion. In the health sector, the total allocation, including expenditures by the Social Security Institution, will reach ₺2.44 trillion.
For social welfare, ₺651 billion has been set aside, representing 4.4% of the total budget. Additionally, ₺472 billion is allocated to ensure affordable electricity and natural gas for citizens.
Minimum wage tax exemption
Since January 2022, Türkiye has exempted minimum wage earners from income tax, benefiting all workers. In 2025, the tax exemption for this measure is expected to total ₺810 billion.
The 2025 budget also allocates ₺706 billion to support agriculture and ₺561 billion for assistance to the real sector.
Defense, security spending
Defense spending for 2025 is projected at ₺913.9 billion, with an additional ₺694.5 billion allocated for internal security. Including funds from the Defense Industry Support Fund, total spending on defense and security will reach ₺1.61 trillion.
Support for local governments
The allocation for local governments, including metropolitan municipalities, other municipalities, and provincial administrations, is expected to increase to ₺1.34 trillion. This is up from 4% of the total budget in 2002 to 9.1% in 2025.
2025 budget proposal submitted to Turkish Parliament
The 2025 Central Government Budget Law Proposal, signed by President Recep Tayyip Erdogan, has been submitted to the Turkish Parliament. It will be reviewed by the Plan and Budget Committee, with discussions expected to last for a month.
Vice President Yilmaz will kick off the committee’s deliberations with a presentation on October 22. Following this, committee members will have a week to prepare before discussions resume. After the committee review, the budget will proceed to the Turkish Parliament.
Projected 2024 budget deficit
The Presidency of Strategy and Budget projects that in 2024, ₺1.03 trillion will be allocated for earthquake-related expenditures. Excluding these costs, the budget deficit is expected to be 3.9% of GDP. The 2025 forecast represents a reduction of 0.8 percentage points compared to the previous year’s deficit.
Yilmaz’s previous statements on deficit reduction
In August, Yilmaz stated, “By the end of this year, we expect the budget deficit to drop below 5%. We are entering a period where the current account deficit, budget deficit, and associated risks are decreasing, while stability is increasing.”
For 2025, the budget deficit is projected to be 3.1% of GDP, reflecting the ongoing reduction trend.
