A more pronounced economic slowdown also increases the risk that fiscal policy remains expansionary, challenging the government’s ability to reach its objective of a primary fiscal balance by 2026.
Scope expects a budget deficit of about 3.6% of GDP in 2025 and in 2026, and a general government debt-to-GDP ratio of 26%.
External and Financial Risks Remain Significant
The Turkish economy is more resilient than it was a few years ago and can accommodate some volatility, due to higher international reserves and more effective macroeconomic policies, which have eased the strains on public and private-sector balance sheets.
Non-resident holdings rose to more than 10% of government debt in January 2025, up from 2% in January 2024. Net assets of the CBRT, excluding foreign-currency swaps with commercial banks, have reached multi-year highs of more than USD 40bn.
However, Türkiye’s BB- ratings…
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