Republic of Türkiye · Türkiye CumhuriyetiGovernment Budget
Fiscal Year 2024
Revenue by Source
Max = TL 2.65T (VAT incl. import VAT) · Total TL 8.67TExpenditure by Function
Max = TL 2.28T (Social Protection — Pensions) · Total TL 10.77TThe Earthquake: A $75B Fiscal Shock Across Two Years
The February 6, 2023 Kahramanmaraş earthquakes (7.8 and 7.7 magnitude) were the deadliest natural disaster in Turkey's modern history — over 50,000 dead, 1.9 million housing units damaged or destroyed, 3.3 million displaced. By end-2024, the government had committed approximately $75 billion in spending including donations, and planned a further $44 billion through 2027. Earthquake-related expenditure accounted for roughly 2.6% of GDP in 2024 alone, and is the single largest reason the headline deficit reached 4.8% of GDP. Excluding earthquake spending, analysts estimated the underlying deficit at around 2.9% of GDP.
Earthquake: $75B committed by end-202460% Inflation & the Interest Rate Shock: From 8.5% to 50%
Following the May 2023 elections, Finance Minister Mehmet Şimşek and CBRT Governor Hafize Erkan reversed years of unorthodox 'Erdoganomics' — the policy of keeping interest rates low despite soaring inflation. The CBRT hiked rates from 8.5% in May 2023 to 50% by March 2024 in nine successive moves. This orthodox pivot crushed inflation (from 86% peak in 2022 toward ~44% end-2024) but detonated the interest payments budget: debt service costs surged more than 30-fold since 2020, reaching TL 1.27T in 2024 — consuming 14.7% of all revenue.
Policy rate: 8.5% → 50% · interest up 30x since 2020EYT Pension Reform: 2.5 Million Early Retirees in One Year
In January 2023, the government resolved the politically charged EYT (Emeklilikte Yaşa Takılanlar — 'those stuck at the retirement age') issue, allowing approximately 2.5 million workers — mostly in their 40s — to retire immediately regardless of age, having met contribution years. The long-term fiscal cost is enormous: total pension and old-age benefits reached TL 2.28 trillion in 2024, nearly half of all social protection spending. Turkey's social protection total hit 11.1% of GDP in 2024, comparable to high-income OECD peers despite Turkey's per-capita income being a fraction of theirs.
EYT: 2.5M early retirees · pensions: TL 2.28TLow Debt, High Deficit: Turkey's Unusual Fiscal Paradox
Turkey presents a striking paradox: a record budget deficit of 4.8% of GDP in 2024, yet public debt of only ~25% of GDP — one of the lowest ratios in the G20 and less than half the 55% median for comparable BB-rated sovereigns. This is because Turkey runs high nominal GDP growth (driven by inflation), which rapidly deflates the debt ratio. The risk, however, lies in the structure: approximately 56% of public debt is foreign-currency denominated or FX-linked, making it acutely sensitive to lira depreciation. The lira lost ~20% against the dollar in 2024 alone.
Debt: ~25% GDP · but 56% FX-linkedThe Informal Economy: Turkey's Revenue Ceiling
Around 28% of Turkey's 32.6 million workers are employed in the informal sector, paying little or no tax or social contributions. This structural informality caps the revenue-to-GDP ratio at ~20% — far below the OECD average of ~34% — meaning Turkey cannot raise sufficient tax revenue to cover its spending ambitions without borrowing. Finance Minister Şimşek has made formalisation a central plank of fiscal consolidation, introducing e-invoicing mandates, digital payroll tracking, and stricter enforcement. Progress is slow: tax revenues grew 62% in 2024, mostly from inflation rather than base expansion.
Informal sector: ~28% of workforceDefence: Bayraktar Drones & Strategic Autonomy on a Budget
Turkey spends approximately $21.5 billion (~1.6% of GDP) on defence — below NATO's 2% target, which Erdoğan has publicly attributed partly to arms embargoes from NATO allies. Despite the constrained budget, Turkey has achieved remarkable defence-industrial self-sufficiency. The Bayraktar TB2 drone became a global export phenomenon. ASELSAN, Roketsan, and BMC produce domestically competitive systems. Defence exports grew from $250M in 2002 to $5.5 billion in 2023. Turkey argues that domestic production dramatically lowers its effective cost per unit of military capability compared to import-dependent peers.
Defence exports: $5.5B · Bayraktar TB2Primary sources: Turkish Ministry of Treasury and Finance — Central Government Budget Final Outcomes 2024 (January 2025); TurkStat (TUIK) — Social Protection Expenditure Statistics 2024; IMF — Article IV Consultation: Turkey 2024; World Bank — Turkey Economic Monitor 2024; Daily Sabah — Budget 2024 Final Data (January 15, 2025); ING Think — Monitoring Turkey (February 2025); Global Finance Magazine — Turkey: Bridging Ambition and Reality (February 2025); AGBI — Turkey's Finances Hold Firm (November 2025); Nordic Monitor — Turkey Defence Budget 2024 (December 2024); SIPRI Military Expenditure Database 2024; Fitch Ratings — Turkey Sovereign Upgrade Report 2024.
Methodology: All figures are central government budget actuals for calendar year 2024, as reported by the Turkish Ministry of Treasury and Finance. GDP: ~TL 43.7T (~$1.32T USD at ~TL 33/$ average for 2024). Revenue: TL 8.67T (+66.5% nominal); Expenditure: TL 10.77T (+63.6% nominal); Deficit: TL 2.11T (−4.8% GDP). Primary deficit: TL 835.7B (~1.9% GDP). Non-interest expenditure: TL 9.5T. Interest payments: TL 1.27T. Tax revenues: TL 7.3T (+62.3%). Social protection total (general government, TurkStat): TL 4.96T (11.1% GDP), of which pensions/old-age TL 2.28T. Earthquake reconstruction spending: ~2.6% GDP in 2024. Public debt: ~25.2% of GDP (Fitch, end-2024); ~56% FX-denominated. Military expenditure: SIPRI $24.98B (2024). Currency: Turkish lira (TL/TRY). Average exchange rate 2024: ~TL 32.9/USD. All TL figures are nominal and reflect ~60% average inflation in 2024.