Budget Balance - May 2026
Alper Gürler
alper.gurler@isbank.com.trH. Erhan Gül
erhan.gul@isbank.com.trDilek Sarsın Kaya
dilek.kaya@isbank.com.trBüşra Ceylan
busra.ceylan@isbank.com.trOnuray Günaydın
onuray.gunaydin@isbank.com.trThe central government budget posted a deficit of 298.2 billion TRY in May.
In May, central government budget expenditures rose by 27% compared to the same month of last year, reaching 1.4 trillion TRY, while budget revenues fell by 18% to 1.1 trillion TRY. Consequently, the central government budget, which had recorded a surplus of 235.2 billion TRY in May 2025, posted a deficit of 298.2 billion TRY in the same month this year. During the same period, Treasury cash flows indicated a deficit of 252.3 billion TRY. Meanwhile, the primary budget balance, which had recorded a surplus in the first quarter, continued to post a deficit of 169.3 billion TRY in May, following April.
While the budget deficit increased by 62.5% yoy, reaching 1.1 trillion TRY in the first five months of the year, the primary budget balance recorded a surplus of 205.6 billion TRY, driven by the positive performance in the first quarter.
Expectations…
In May, the ongoing effects of the sliding-scale mechanism, coupled with the postponement of tax payments to June due to the holiday season, led to a decline in tax revenues and caused the budget deficit recorded since the beginning of the year to rise from 759 billion TRY in April to 1.1 trillion TRY in May. Consequently, the budget deficit in January–May period accounted for 39% of the target for the full year 2026. Following the preliminary agreement reached between the U.S. and Iran, developments in the Middle East in the coming period will be closely monitored in terms of the sliding scale mechanism, economic activity, and consequently the pace of the central government budget.
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