Ankara:Turkey is aiming for an economic growth rate of 4.2% in 2027, up from the expected 3.3% this year, driven by an improved global economic outlook and recovery in external demand, Vice President Cevdet Yilmaz announced alongside the presentation of next year's budget proposal.
According to Anadolu Agency, Yilmaz presented the 2027 budget proposal at the presidential complex, highlighting that stronger economic growth among Turkey's trading partners is anticipated to boost exports and foster balanced economic expansion. The Turkish economy previously recorded a growth of 3.7% in 2025, with investments outpacing private consumption, which strengthened production capacity.
The government has set a goal to gradually increase growth to 5% by the end of its medium-term program through policies that emphasize productivity, technological transformation, and innovation. Employment is projected to rise by 657,000 people next year, with labor force participation reaching 53.4% and unemployment declining to 8% from 8.1% in 2026.
Yilmaz also addressed inflation, which fell below 30% in September. It is expected to reach 28.4% by the end of this year and decline to 21% by the end of 2027. He emphasized that maintaining price stability is a fundamental priority, with fiscal discipline and income policies supporting monetary policy, and supply-side measures, particularly in social housing and food, reinforcing disinflation.
The current account deficit is expected to decrease to less than 2% of GDP next year from an estimated 2.6% in 2026. Turkey plans to continue policies aimed at boosting exports, enhancing energy supply security, and reducing reliance on energy imports.
In the first nine months of the year, goods exports rose by 5.2% year-on-year to $211 billion, setting a new annual record of $283.7 billion. Medium-high- and high-technology products now make up 44% of exports, compared to around 28% in the early 2000s.
The 2027 budget proposal forecasts expenditures of 27.276 trillion Turkish liras and revenues of 23.408 trillion liras ($551.2 billion), with national income anticipated to reach $2.24 trillion. The proposal outlines a budget deficit of $78.1 billion, or 3.5% of GDP, which would be 2.8% excluding earthquake-related expenditures.
Interest expenditures are projected at $80.2 billion, personnel spending at $143.7 billion, and current transfers at $206.7 billion, with a primary surplus expected next year. For 2026, the deficit is forecast at 3.1% of GDP, below the initially projected 3.5%, despite pressure from rising energy and commodity prices.
Urban transformation funding is set to increase by 176% to $5.57 billion in 2027, with disaster resilience and expanded social and rental housing remaining priorities. Between 2023 and 2026, earthquake reconstruction spending reached $109 billion in current prices, with 455,357 independent units completed and delivered. Turkey's general government debt, as defined by the EU, declined to 22.3% of GDP in the second quarter from 23.1% in the first, underscoring the advantage of low public indebtedness amid global uncertainty.