Şimşek Emphasizes Macro Stability: Budget, Debt and Credit Policies

Finance Minister Mehmet Şimşek outlined reforms aimed at strengthening macroeconomic stability.

Şimşek's Commitment to Stability

Minister Şimşek declared, "Under the leadership of our President, we will continue to implement policies that boost productivity, support high‑value‑added production, and reinforce macroeconomic stability in line with the country's development goals."

Sharp Reductions in Budget Deficit and Public Debt

■The budget deficit to GDP ratio fell from 11% to 2.9%.

■General government debt to GDP ratio dropped from 71.2% to 23.8%.

■The share of interest payments in total budget expenditures fell from 43% to 14%, while the share in tax revenues decreased from 86% to 18.6%.

Credit and Financing Support: Farmers, Artisans and Exporters

■Farmer credit and financing balances rose from ₺735 million to ₺833 billion, with roughly 70% of the interest burden covered by the Treasury.

■Credit for artisans and craftspeople increased from ₺153 million to ₺297 billion.

■Exporter credit and insurance support grew from $5 billion to $54.2 billion.

External Financing and Reserve Strengthening

■Total FDI received between 1975‑2001 was $14 billion, while in the 2002‑2025 period it surged to $288.9 billion.

■Exports expanded from $36.1 billion to $273.3 billion, raising Turkey's share of global exports from 0.55% to 1.04%.

■The Central Bank's gross reserves reached approximately $160 billion as of July 2026.

Market and Investor Sentiment

These quantitative improvements lower risk perception among domestic and foreign investors, while easing credit costs and signaling a stronger TL foundation.

Expert Note (Burak Yalın): The fiscal discipline and credit extensions embedded in Turkey's macro‑stability agenda will act as a vital catalyst for reviving SME credit flows. Nonetheless, the persistently high 70% interest‑burden coverage indicates a need to keep long‑term loan costs in check. Strengthened central bank reserves can curb FX volatility and reduce external borrowing costs, boosting the competitiveness of export‑oriented sectors. Policymakers should consider broadening credit collateral options and risk‑sharing mechanisms to make credit more inclusive and resilient.