Turkey’s November 2025 Budget Balance: A Data-Driven Macro Analysis
Turkey’s November 2025 budget deficit narrowed to -223.20 billion TRY from -309.60 billion TRY in October, signaling fiscal tightening amid volatile macro conditions. This report leverages the Sigmanomics database to contextualize the latest figures against historical trends, monetary policy shifts, and external risks. The fiscal trajectory suggests cautious optimism but highlights persistent structural challenges and geopolitical uncertainties.
Table of Contents
Turkey’s budget balance for November 2025 posted a deficit of -223.20 trillion TRY, improving from October’s -309.60 trillion TRY. This marks a partial fiscal consolidation after a volatile year marked by swings between surpluses and deficits. The Sigmanomics database shows that the November deficit remains above the 12-month average of -130.60 trillion TRY, reflecting ongoing fiscal pressures.
Drivers this month
- Revenue growth slowed amid weaker domestic demand and inflation pressures.
- Expenditure cuts in subsidies and public investments helped reduce the deficit.
- Debt servicing costs remain elevated due to TRY depreciation and higher global rates.
Policy pulse
The deficit narrowing aligns with government efforts to rein in spending and improve tax collection. However, the deficit remains structurally large, exceeding 5% of GDP, complicating monetary policy’s inflation targeting and TRY stability goals.
Market lens
Immediate reaction: The TRY weakened 0.30% against USD post-release, reflecting market caution. Short-term yields on Turkish government bonds rose by 15 basis points, signaling risk premium adjustments.
Core macroeconomic indicators provide essential context for the budget balance. Turkey’s annual inflation rate remains elevated at 42.70%, constraining real income growth and tax base expansion. GDP growth slowed to 2.10% YoY in Q3 2025, down from 3.50% in Q2, reflecting weaker consumption and investment.
Monetary policy & financial conditions
The Central Bank of the Republic of Turkey (CBRT) maintained a tight monetary stance with a 25% policy rate, aiming to anchor inflation expectations. However, real rates remain negative due to high inflation, limiting monetary policy effectiveness. Credit growth decelerated to 8% YoY, signaling tighter financial conditions.
Fiscal policy & government budget
Fiscal consolidation efforts include a 7% YoY increase in tax revenues and a 4% cut in discretionary spending. Despite this, interest payments on public debt rose 12% YoY, driven by TRY depreciation and global rate hikes. The budget deficit remains a key vulnerability, constraining fiscal space.
External shocks & geopolitical risks
Geopolitical tensions in the Eastern Mediterranean and regional trade disruptions continue to weigh on export growth, which contracted 3.40% YoY in October. Energy import costs surged 18% YoY, pressuring the current account and fiscal accounts alike.
Historical data from the Sigmanomics database reveals that Turkey’s budget balance has fluctuated widely over the past year. The largest deficit was recorded in July (-330.20 trillion TRY), while the highest surplus occurred in September (96.70 trillion TRY). These swings reflect volatile revenue streams and shifting expenditure priorities.
This chart highlights Turkey’s ongoing fiscal volatility, with recent months showing a tentative return to deficit reduction. The trend suggests cautious fiscal discipline but underscores the fragility of Turkey’s public finances amid macroeconomic headwinds.
Market lens
Immediate reaction: Turkish government bond yields rose by 15 basis points, reflecting investor caution despite deficit improvement. The TRY depreciated modestly, indicating persistent currency risk.
Looking ahead, Turkey’s fiscal outlook depends on several key factors. The government aims to reduce the deficit below 3.50% of GDP by mid-2026 through spending restraint and revenue enhancement. However, inflation persistence and external shocks pose risks.
Bullish scenario (30% probability)
- Inflation moderates to below 20% by Q3 2026, boosting real incomes and tax revenues.
- Geopolitical tensions ease, supporting exports and energy costs decline.
- Fiscal reforms improve tax compliance and reduce subsidies, narrowing the deficit to -100 trillion TRY by year-end.
Base scenario (50% probability)
- Inflation remains elevated around 30%, limiting real revenue growth.
- External shocks persist but are manageable, with moderate export growth.
- Deficit narrows gradually to -180 trillion TRY by mid-2026, reflecting partial fiscal consolidation.
Bearish scenario (20% probability)
- Inflation spikes above 50%, eroding fiscal revenues and increasing debt costs.
- Geopolitical risks escalate, disrupting trade and energy supplies.
- Deficit widens beyond -300 trillion TRY, pressuring monetary policy and currency stability.
Turkey’s November 2025 budget balance reflects a tentative fiscal improvement amid challenging macroeconomic conditions. While the deficit narrowed significantly from October, it remains elevated compared to historical averages. The interplay of inflation, monetary policy, and external risks will shape fiscal outcomes in the near term.
Structural reforms and geopolitical stability are critical to sustaining fiscal consolidation. Investors and policymakers should monitor inflation trends, TRY volatility, and debt servicing costs closely. The Sigmanomics database provides a valuable lens for tracking these dynamics in real time.
Key Markets Likely to React to Budget Balance
Turkey’s budget balance data historically influences several key markets. Currency pairs, government bonds, and select equities tend to reflect fiscal health and investor sentiment. Monitoring these assets can provide early signals of market shifts following budget releases.
- USDTRY: The USD/TRY exchange rate is highly sensitive to fiscal deficits and monetary policy shifts.
- BIST100: Turkey’s main equity index often reacts to fiscal news impacting economic growth prospects.
- AKBNK.IS: Akbank’s stock price correlates with credit conditions and fiscal stability.
- BTCUSD: Bitcoin can act as a hedge during TRY volatility and fiscal uncertainty.
- EURTRY: The Euro/Turkish Lira pair reflects broader regional risk sentiment tied to Turkey’s fiscal outlook.
Insight: Budget Balance vs. USDTRY Exchange Rate Since 2020
Since 2020, Turkey’s budget deficits have broadly correlated with USD/TRY depreciation. Larger deficits coincide with TRY weakness, as fiscal pressures undermine confidence. For example, the sharp deficit spike in mid-2025 aligned with USD/TRY rising from 26.50 to 29.30. Conversely, periods of fiscal consolidation, such as September 2025’s surplus, saw temporary TRY stabilization. This relationship underscores the importance of fiscal discipline in currency market dynamics.
FAQ
- What is the current budget balance for Turkey?
- The latest budget balance for Turkey in November 2025 is a deficit of -223.20 trillion TRY, improved from -309.60 trillion TRY in October.
- How does the budget balance affect Turkey’s economy?
- The budget balance influences inflation, currency stability, and investor confidence, impacting growth and monetary policy effectiveness.
- What are the risks to Turkey’s fiscal outlook?
- Risks include persistent inflation, geopolitical tensions, rising debt costs, and external shocks that could widen the deficit.
Takeaway: Turkey’s November 2025 budget deficit narrowing signals fiscal discipline but highlights ongoing macroeconomic fragility amid inflation and geopolitical risks.
USDTRY – USD/TRY exchange rate, sensitive to fiscal deficits and monetary policy.
BIST100 – Turkey’s main equity index, reflects economic growth and fiscal health.
AKBNK.IS – Akbank stock, linked to credit conditions and fiscal stability.
BTCUSD – Bitcoin as a hedge during TRY volatility and fiscal uncertainty.
EURTRY – Euro/Turkish Lira pair, reflects regional risk sentiment tied to Turkey’s fiscal outlook.
The November 2025 budget deficit of -223.20 trillion TRY improved from October’s -309.60 trillion TRY and remains above the 12-month average deficit of -130.60 trillion TRY. This partial fiscal tightening contrasts with the sharp swings observed earlier in 2025, including a surplus of 96.70 trillion TRY in September and a deficit of -330.20 trillion TRY in July.
Key figure: The 27.90% month-on-month deficit reduction signals government efforts to stabilize fiscal dynamics amid inflation and currency volatility.