 deficit in May, reversing a 235.2 billion lira surplus a year earlier as tax revenue fell and government spending increased, official data showed Monday.){kind=link}
Turkey’s government budget posted a 298.2 billion lira ($6.5 billion) deficit in May, reversing a 235.2 billion lira surplus a year earlier as tax revenue fell and government spending increased, official data showed Monday.
The result represented a 533.5 billion lira deterioration in the monthly budget balance from May 2025, according to figures released by the Treasury and Finance Ministry.
Budget revenue fell 18 percent from a year earlier to 1.09 trillion lira, while expenditure rose 27 percent to 1.38 trillion lira.
Tax revenue declined 22.1 percent to 931.5 billion lira, accounting for most of the fall in government income.
Income tax receipts fell 57.4 percent, corporate tax revenue declined 21.9 percent and domestic value-added tax revenue dropped 66.1 percent.
Revenue from the special consumption tax, imposed on products including fuel, vehicles, tobacco and alcohol, fell 9.5 percent.
Value-added tax collected on imports increased 17.5 percent, while revenue from banking and insurance transaction taxes rose 25.6 percent.
The primary budget balance, which excludes interest payments, recorded a deficit of 169.3 billion lira in May, compared with a primary surplus of 346.4 billion lira in the same month last year.
Interest payments rose 16 percent to 128.9 billion lira.
Part of the annual decline in tax receipts reflected a change in the tax collection calendar rather than only a loss of government revenue.
Akbank Economic Research had predicted a deterioration in the May balance after the government reinstated a fourth provisional corporate tax return, an advance tax filing.
The change meant that corporate tax revenue collected in May last year was collected in February of this year, affecting comparisons between the two months.
The government’s budget deficit reached 1.057 trillion lira ($22.9 billion) during the first five months of 2026, up 62.5 percent in nominal terms from 650.3 billion lira in the same period last year.
The comparison does not account for inflation, which stood at 32.61 percent in May.
Government expenditure increased 37.4 percent from January through May to 7.33 trillion lira, while revenue rose 33.9 percent to 6.28 trillion lira.
Tax collection during the five-month period increased 32.4 percent to 5.3 trillion lira.
The budget recorded a primary surplus of 205.6 billion lira during the period, up from 185.5 billion lira a year earlier.
Interest payments reached 1.26 trillion lira, or about $27.3 billion, during the first five months, an increase of 51.1 percent from the same period last year.
The figures show that interest costs accounted for the cumulative deficit since revenue exceeded spending when interest payments were excluded.
Personnel spending increased 43.1 percent to 2.1 trillion lira during the five-month period, while government contributions to social security institutions rose 49.3 percent to 267.3 billion lira.
Spending on goods and services increased 39.7 percent to 472 billion lira, and current transfers rose 29.2 percent to 2.65 trillion lira.
Turkey has approved 18.98 trillion lira in central government spending for 2026 and expects the budget deficit to equal about 3.5 percent of gross domestic product.
The government had used 38.6 percent of its annual spending allocation by the end of May.
The budget figures were released as Turkey’s central bank maintains its benchmark interest rate at 37 percent in an effort to contain inflation, which rose to 32.61 percent in May from 32.37 percent in April.