Turkey’s central government debt climbed to 13.17 trillion TRY in November 2025, according to the latest release from the Sigmanomics database. This figure represents a 1.60% increase from October’s 12.96 trillion TRY and a sharp 42.30% rise compared to November 2024’s 9.25 trillion TRY. The upward trend continues a year-long acceleration in debt accumulation, reflecting ongoing fiscal deficits and macroeconomic challenges.

Drivers this month

• Increased government borrowing to finance infrastructure and social programs.
• Higher interest costs due to monetary tightening and TRY depreciation.
• Delayed revenue inflows amid slower economic growth.

Policy pulse

The debt level remains above the 12-month average of 11.10 trillion TRY, signaling sustained fiscal expansion despite central bank efforts to curb inflation through higher interest rates. The government’s budget deficit widened to 4.50% of GDP in Q3 2025, intensifying debt service pressures.

Market lens

Immediate reaction: The TRY weakened 0.80% against the USD within the first hour of the debt release, while 2-year government bond yields rose 15 basis points, reflecting investor concerns over fiscal sustainability and inflation risks.

Core macroeconomic indicators provide essential context for Turkey’s rising debt. Inflation remains elevated at 28.40% YoY in October 2025, constraining real income growth and tax revenues. GDP growth slowed to 2.10% YoY in Q3, down from 3.50% in Q2, indicating a cooling economy amid tighter monetary conditions.

Monetary Policy & Financial Conditions

The Central Bank of the Republic of Turkey (CBRT) has raised its policy rate to 24.00% to combat inflation, the highest level since 2023. This tightening increases government borrowing costs, contributing to the debt rise. Credit spreads on sovereign bonds widened by 40 basis points over the past month, reflecting heightened risk premiums.

Fiscal Policy & Government Budget

Fiscal deficits remain elevated, with the government running a primary deficit of 1.20% of GDP in Q3. Public spending on subsidies and social transfers increased by 8% YoY, while tax revenues grew only 4%, exacerbating borrowing needs. The debt-to-GDP ratio now stands at approximately 65%, up from 58% a year ago.

External Shocks & Geopolitical Risks

Geopolitical tensions in the Eastern Mediterranean and ongoing trade frictions with key partners have pressured the TRY and foreign investment inflows. Energy price volatility and supply chain disruptions further strain fiscal balances, increasing the risk premium on government debt.

Historical comparisons show that the current debt level is the highest recorded in the past five years, surpassing the 2023 peak of 12.50 trillion TRY. The monthly growth rate has averaged 1.30% over the past year, up from 0.90% in 2023, reflecting a structural shift in fiscal dynamics.

Market lens

Immediate reaction: Sovereign bond yields jumped 15 basis points post-release, while the TRY depreciated 0.80% versus the USD, reflecting investor caution. Breakeven inflation rates edged higher, pricing in sustained inflationary pressures.

Looking ahead, Turkey’s central government debt trajectory will hinge on several key factors, including fiscal discipline, monetary policy stance, and external environment stability.

Bullish scenario (20% probability)

• Successful fiscal consolidation reduces deficits to below 3% of GDP by mid-2026.
• Inflation moderates to single digits, enabling CBRT to ease rates gradually.
• TRY stabilizes, restoring investor confidence and lowering borrowing costs.
• Debt growth slows to under 5% YoY, improving debt-to-GDP metrics.

Base scenario (60% probability)

• Fiscal deficits remain around 4-5% of GDP, with moderate spending restraint.
• Inflation declines slowly but remains above 15% through 2026.
• CBRT maintains high policy rates, keeping borrowing costs elevated.
• Debt grows at 10-12% YoY, pushing debt-to-GDP toward 70% by year-end.

Bearish scenario (20% probability)

• Geopolitical shocks and energy price spikes worsen fiscal balances.
• Inflation surges above 30%, forcing CBRT to hike rates further.
• TRY depreciates sharply, increasing foreign currency debt burdens.
• Debt growth exceeds 15% YoY, risking sovereign credit rating downgrades.

Policy coordination between fiscal authorities and the CBRT will be critical to navigating these risks. Enhanced transparency and targeted reforms could help anchor market expectations and stabilize debt dynamics.

Turkey’s central government debt continues its upward climb, reflecting persistent fiscal deficits amid challenging macroeconomic conditions. The latest 13.17 trillion TRY figure underscores the need for prudent fiscal management and monetary policy calibration. While risks from inflation, currency volatility, and geopolitical tensions remain, there is room for stabilization if reforms and external conditions improve.

Investors and policymakers should monitor debt growth closely, as sustained acceleration could undermine financial stability and economic growth prospects. Balanced approaches that combine fiscal discipline with growth-friendly policies will be essential to ensure long-term debt sustainability.