(The Turkish Post) – Türkiye’s government on Oct. 16 unveiled a 2027 budget proposal of 27.276 trillion lira (about $551 billion) that raises funding for social housing by 150% and for urban transformation by 176%, Vice President Cevdet Yılmaz said in Ankara.
Yılmaz said the housing push is meant to curb rent increases and, together with steps on food supply, to keep inflation falling. Annual inflation dropped below 30% in September, which he described as the first time in a long while.
2027 budget spending, revenue and deficit
Presenting the proposal at the presidential complex, Yılmaz said central government spending would reach 27.276 trillion lira and revenue 23.408 trillion lira in 2027, leaving a gap of about 3.87 trillion lira.
The deficit is forecast at 3.5% of gross domestic product, or $78.1 billion, and at 2.8% when spending on the 2023 earthquake zone is excluded. The government expects national income to reach 111 trillion lira, or $2.24 trillion, and the budget to keep a primary surplus.
For 2026, the government now expects a deficit of 3.1% of GDP, below the 3.5% it projected when the current budget was drawn up. Interest payments in the 2027 budget are set at 3.975 trillion lira.
Yılmaz called the plan a budget of “resilience, prosperity and transformation.” The proposal covers the budgets of 230 public administrations and goes to parliament with President Recep Tayyip Erdoğan’s signature.
Social housing funds rise to 250 billion lira
Support for social housing finance will rise 150% to 250 billion lira, Yılmaz said. The government plans to speed up construction of social housing for low-income families, people with disabilities and young people about to marry.
It will also expand social housing and rental social housing “to limit rent increases and meet housing needs,” he said. Social housing and food are the two areas the government names for supply-side measures to support disinflation.
Urban transformation spending up 176%
Funding for urban transformation, the program to demolish and rebuild buildings at risk in an earthquake, will rise 176% to 276 billion lira. Yılmaz said making cities resilient to disasters would remain a core priority in this and later budgets.
He said reconstruction in the region hit by the February 2023 earthquakes was largely complete. Spending there over 2023 to 2026 totals 5.4 trillion lira at current prices, equal to about $104 billion, and 455,357 independent units have been completed and handed over.
Education, health and energy support
Education receives the largest share of the 2027 budget at 13.7%, or 3.747 trillion lira including universities. The Ministry of National Education is allocated 2.459 trillion lira, and university budgets rise to 872 billion lira.
Central government health spending is set at 2.134 trillion lira, and total health spending, including the Social Security Institution, at 4.532 trillion lira. Social assistance gets 1.341 trillion lira, or 4.9% of the budget.
Support for household electricity and natural gas bills rises 62% to 605 billion lira. Value-added tax is expected to remain the largest source of revenue at about 5.68 trillion lira, ahead of income tax at 5.53 trillion lira.
Growth and inflation targets
“In 2027, we expect our growth to rise to 4.2%, supported by the anticipated improvement in the global outlook and the recovery in external demand,” Yılmaz said. The economy grew 3.7% in 2025 and is expected to expand 3.3% this year, with a goal of 5% growth in 2029.
Annual inflation is forecast to end 2026 at 28.4% and fall to 21% by the end of 2027. “Price stability is the fundamental priority of our program,” Yılmaz said, adding that the medium-term aim is lasting single-digit inflation.
Employment is expected to grow by 657,000 people next year and unemployment to fall to 8%. The current account deficit is projected to fall below 2% of GDP in 2027 from 2.6% this year.
Türkiye’s general government debt, as defined by the European Union, fell to 22.3% of GDP in the second quarter of 2026 from 23.1% in the first quarter, Yılmaz said.
Parliament’s timetable for the 2027 budget
The proposal now goes to the Grand National Assembly of Türkiye. Yılmaz is scheduled to present it to parliament’s Plan and Budget Committee on Oct. 21, and the committee is due to finish its review of ministry and agency budgets on Nov. 27 before the bill moves to the full assembly.
