The figures announced recently in the economy have brought the developments in the public finance and banking sector to the agenda again. According to the budget realizations of the Ministry of Treasury and Finance, interest expenses in the January-September period of 2026 increased by 35.4 percent compared to the same period of the previous year, reaching 2 trillion 251 billion liras. In the same period, 13 trillion 948 billion liras were spent from the central government budget, while total revenues were at the level of 12 trillion 108 billion liras. The nine-month budget deficit amounted to approximately 1 trillion 840 billion lira. The share of interest payments in total budget expenditures reached 16.1 percent.
20 TIMES THE AGRICULTURAL SUPPORT
The most striking comparison in the budget data emerged between interest payments and agricultural supports. While 114 billion liras were spent from agricultural support items in the first nine months, interest expenses reached approximately 20 times this amount. Of the payments made to farmers, 84 billion lira consisted of plant production support and 26 billion lira consisted of livestock support. In the same period, 583 billion lira was spent on capital transfer. Thus, interest expenses were approximately four times this amount. The payment for foreign debt interest exceeded 248 billion lira.
PROFIT IS DECREASING IN BANKS
In the banking sector, expectations for the third quarter balance sheets were announced. According to the evaluations of intermediary institutions, a decrease of 4 percent in the total net profit of the sector compared to the previous quarter and a decrease of around 7 percent compared to the same period last year is expected. According to analysis, the volume of problematic loans in the banking system increased by 145 billion lira in the third quarter, reaching 917 billion lira. While the quarterly increase in problem loans exceeded 50 percent, it was stated that banks’ credit risk cost also increased. The sector’s third quarter financial results are expected to be announced on October 27.
364 BILLION DOLLAR DEFICIT
The Central Bank’s international investment position data for August also revealed Türkiye’s external financial outlook. While total financial assets abroad increased by 6.1 percent compared to the previous month, reaching 445.2 billion dollars, liabilities abroad decreased by 1.1 percent, falling to 809.7 billion dollars. Thus, the net international investment position deficit decreased from 398.7 billion dollars to 364.5 billion dollars. A decrease of 34.2 billion dollars was recorded in the deficit in one month. In the same period, reserve assets increased by 22.2 billion dollars, reaching 186.7 billion dollars, and direct investment assets reached 82.4 billion dollars.
1.5 BILLION LOSSES
There was a decline in daily calculations regarding foreign exchange reserves. While net reserves calculated from the Central Bank’s analytical balance sheet were at the level of 46.10 billion dollars on October 16, they decreased to 44.62 billion dollars as of October 19. The loss in one business day was approximately 1.48 billion dollars, and the proportional decrease was 3.21 percent. Net reserves excluding swaps decreased from 50.41 billion dollars to 48.87 billion dollars in the same period. It was calculated that net reserves reached the highest level of the last two years with 93.43 billion dollars on January 29, 2026, and decreased to 24.21 billion dollars on March 30.
