June Budget Surplus: Central Government's Credit Policy Shift and Sectoral Impact

Turkey's Central Government's decision to allocate excess budget in June has negatively impacted KOBİ credit tightening and the growth rate of commercial credit. This policy has also adversely affected banking sector's macroprudential measures.

June Budget Surplus and Credit Policy's Decline Central Government's June budget allocation has led to a decline in KOBİ credit and commercial credit growth rate.

■KOBİ credit decreased by 12.5% - Commercial credit growth rate decreased by 8.7% ## Banking Sector's Macroprudential Measures and Impact This policy has also negatively impacted the banking sector's macroprudential measures.

■Banks' risk management has been strained - Liquidity shortages have increased - Credit profitability has declined > Central Government's decisions have introduced tightening in the credit market while also straining banks' liquidity management. This has led to a decline in commercial credit demand and further tightening in KOBİ credit.