Turkiye unveils 2027 budget proposal with big rises in housing spending

Türkiye's 2027 budget proposal, aimed at disinflation and boosting investment, employment, and exports, was unveiled by Vice President Cevdet Yılmaz on Friday. The TL 27.28 trillion ($550.8 billion) budget, set to be presented to Parliament, is described as a "budget of resilience, prosperity, and transformation" in the face of challenging regional and global circumstances.

Despite global financial tightening, external demand weakening, and rising costs, the Turkish economy has continued to grow, with the government projecting a 4.2% growth rate in 2027, up from a projected 3.3% this year. The Medium-Term Program (MTP) aims to accelerate growth to 5% by 2029 through policies focused on productivity, technological transformation, and innovation.

Employment is expected to rise by 657,000 people and labor force participation to reach 53.4%, while unemployment is forecast to fall to 8% from 8.1% in 2026. Inflation, which has improved despite energy and commodity price fluctuations, is projected to decline to 21% by the end of 2027, with the government targeting single-digit inflation.

The 2027 budget deficit is expected to be 3.5% of GDP, falling to 2.8% excluding earthquake-related spending. Public indebtedness, currently at 22.3% of GDP, is seen as a significant advantage amid global uncertainty. The current account deficit, projected at 2.6% of GDP this year, is expected to fall below 2% next year. The budget will support export growth, energy supply security, and reduced reliance on energy imports.