Turkiye Unveils 2027 Budget Proposal With Big Rises in Housing Spending

Türkiye’s 2027 budget will aim to support disinflation while strengthening investment, employment and exports, Vice President Cevdet Yılmaz said Friday.

The proposal, which includes spending of almost TL 27.28 trillion (about $550.8 billion), is ready to be sent to Parliament.

Yılmaz spoke at a ceremony to present the plan, which he called a “budget of resilience, prosperity and transformation,” prepared in the face of difficult regional and global conditions. The Turkish economy has kept growing even as global financial conditions tightened, external demand weakened and cost pressures rose, Yılmaz said, adding that the effects of weaker foreign demand and energy costs were limited.

Stronger growth among trading partners would create opportunities for exports and support balanced expansion, he said.

The government expects growth to rise to 4.2 percent in 2027 from a projected 3.3 percent this year, as the global outlook improves and external demand recovers. The economy grew 3.7 percent in 2025.

Under the Medium-Term Program (MTP), growth should accelerate gradually to 5 percent in 2029 through policies focused on productivity, technological transformation and innovation.For 2027, employment is expected to rise by 657,000 people and labor force participation to reach 53.4 percent . Unemployment is forecast to fall to 8 percent from a projected 8.1 percent in 2026. The underlying trend in inflation continues to improve despite fluctuations in energy and commodity prices, Yılmaz said. Annual inflation, which fell below 30 percent in September, is forecast to end this year at 28.4 percent and decline to 21 percentby the end of 2027.

“Price stability is the fundamental priority of our program,” he said. The medium-term goal, he said, is lasting single-digit inflation, helped by supply-side policies, notably in social housing and food. The government now expects this year’s budget deficit to come in at 3.1 percent of GDP, below the initial 3.5 percent projection, as revenues are running above expectations.

For 2027, Yılmaz projected the deficit at 3.5 percent of GDP, or $78.1 billion, which would fall to 2.8 percent excluding earthquake-related spending. The budget is expected to maintain a primary surplus next year.

Turkiye’s EU-defined general government debt declined to 22.3 percent of GDP in the second quarter from 23.1 percent in the first. Yılmaz described low public indebtedness as an important advantage amid global uncertainty. The current account deficit is projected at 2.6 percent of GDP this year, which Yılmaz called manageable despite a temporary rise caused by the Iran war. The government expects it to fall below 2 percent next year.

Türkiye will continue policies to boost exports, strengthen energy supply security and reduce reliance on energy imports, Yılmaz said.