Levent Gürses
Last week brought striking data and statements. The Treasury and Finance Ministry announced the budget figures for November. In 11 months, 1.9 trillion TL went to interest payments from the budget. The budget target for interest was fully met in 11 months. The money spent on interest exceeded that spent on education and health. On the other hand, the cost of living and high interest rate policy are gradually increasing the debt burden on citizens. Citizens’ credit debt rose by 59 per cent to 5.4 trillion TL. Debt per person exceeded 125,000 lira.
Another significant development was that while negotiations on the minimum wage increase were ongoing, the poverty line rose to 39,000 lira. In this situation, the minimum wage remained 76 per cent below the poverty line.
The week’s important developments are as follows:
Interest payments reached 1.9 trillion lira in 11 months
The Ministry of Treasury and Finance announced the budget data for the first 11 months. Interest expenses in the first 11 months of the year increased by 62 per cent compared to the same period last year, reaching 1 trillion 937 billion 710 million 438 thousand TL. Thus, 99.4 percent of the budget target for interest expenses was achieved in 11 months. Interest expenses accounted for 15 percent of budget expenditures. If this trend continues, interest expenses in 2025 will exceed the budget target. According to an analysis by Nefes newspaper, 1 trillion 699 billion TL was spent on education services and 1 trillion 98 billion TL on health services from the budget in 11 months. The amount spent on interest exceeded that spent on education and health. 14% more money was spent on interest than on education and 76% more than on health.
In November, central government budget expenditures amounted to 1 trillion 250 billion TL, while budget revenues reached 1 trillion 419 billion TL. The budget recorded a surplus of 169.5 billion TL in November. In the January-November 2025 period, central government budget expenditures reached 12 trillion 842 billion TL and budget revenues reached 11 trillion 571 billion TL. The budget deficit reached 1 trillion 270 billion TL in the 11-month period.
Citizens worked for the budget
Tax revenues in November increased by 55.3 per cent compared to the same month last year, reaching 1 trillion 272 billion TL. In the January-November 2025 period, tax revenues increased by 51.6 per cent compared to last year, reaching 10 trillion 2 billion TL. In 11 months, 2 trillion 531 billion TL in income tax, 1 trillion 196 billion TL in corporate tax, 1 trillion 786 billion TL in Special Consumption Tax (ÖTV), 1 trillion 413 billion TL in VAT, and 103 billion TL in Motor Vehicle Tax (MTV) were collected. The government obtained 22% of its budget revenues from income tax. Income tax collected in 11 months exceeded the 2025 budget target. 18.8% more than the 2.1 trillion TL income tax target was collected.
The largest increase was in income tax
The data revealed that the tax burden was on the citizens. Compared to last year, the largest increase in taxes collected was 88.3 per cent in income tax. Seventy-three per cent of corporate tax was collected in 11 months. One hundred and eleven point five per cent more tax was collected from citizens than from companies. Compared to last year, fees increased by 63.4%, Bank and Insurance Transactions Tax by 63.2%, Special Consumption Tax by 39.8%, and corporate tax by 37.5%.
13 billion lira in covert expenditure
The Presidential Office’s covert expenditure, known as secret service expenses, also broke records. In November, 481 million 540 thousand TL was spent on the secret budget. In the first 11 months of this year, the amount allocated to the secret budget reached 12.9 billion TL. Compared to the same period last year, when secret spending was 10.8 billion TL, this represents a 20% increase on an annual basis.
Debt has taken millions hostage
Livelihood difficulties and high-interest-rate policies have increased the debt burden. Citizens’ credit debt has increased by 59 per cent, reaching 5.4 trillion TL. Debt per person exceeded 125,000 TL. According to a special report by Nefes newspaper, data from the Turkish Banks Association Risk Centre for October revealed that millions of people have been dragged into debt.
The data shows that the total cash credit volume reached 22 trillion 642 billion TL. Loans entering liquidation due to non-repayment increased by 91 per cent in the last year, reaching 668 billion TL. Citizens experiencing cash flow problems turning to loans and credit cards has pushed individual debt to record levels.
The individual credit debt balance reached 5 trillion 440 billion TL in October, a 59% increase compared to the same period last year. Credit cards accounted for the largest share of individual loans, with 2 trillion 700 billion TL. Thus, credit cards constituted half of citizens’ debts. Credit cards were followed by consumer loans, amounting to 1 trillion 325 billion TL. The number of individuals with personal loan debt increased by 1.9 million over the past year, reaching 43.3 million people. The average debt per person rose by 42.7 percent over the past year, from 88,155 TL to 125,748 TL.
The poverty line in December was 39,000 TL, and the poverty threshold was 97,000 TL
Meanwhile, the Research Centre of the Office Workers’ Union (BES) released new data. It was calculated that in December 2025, a family of four civil servants would need to spend 39,009 TL per month to eat healthily, while the cost of living for a single (unmarried) worker would reach 64,009 TL. The union announced the poverty line as 97,082 TL.
According to these results, the minimum wage remained below the poverty line in 2025. A minimum wage earner receiving a net 22,104 lira earns 76.48 per cent less than the poverty line of 39,009 lira, which is only enough to feed themselves. The cost of healthy nutrition exceeded 1,300 lira per day.
Şimşek: We have entered the third phase of the economic programme
Speaking at a ceremony where he was awarded an honorary doctorate at Batman University, Treasury and Finance Minister Mehmet Şimşek stated that the economic programme had entered its third phase, saying, “In the third phase, inflation will fall to single digits over the next two years. The budget deficit will permanently fall below 3 per cent of national income. The current account deficit will permanently fall below 1 per cent.”
In his presentation on the 2026 budget to the Grand National Assembly of Turkey, Şimşek also said, “In 2026, more supportive global financial conditions, moderate commodity prices, tight monetary and fiscal policy, strengthened financial stability, and accelerated improvement in expectations will create stronger momentum for disinflation. Therefore, we believe that inflation will continue to decline in line with targets in 2026.”
Şimşek noted that there is rigidity in service inflation in Turkey, particularly in the last two years, with rent and education inflation at least double the headline rate. He emphasised that in the coming period, the housing supply will increase with the social housing campaign and the completion of earthquake housing, which will limit rent increases.
Minister: We met with Türk-İş, we received an offer; Türk-İş: No one met with us
There are interesting developments concerning Türk-İş, which is protesting the minimum wage negotiations. Labour and Social Security Minister Vedat Işıkhan stated that they met with Türk-İş and received an offer, while Türk-İş said, ‘No one met with us, we will not be on the commission.’
Minister Işıkhan stated that he had met with Türk-İş and Hak-İş before the second meeting of the Minimum Wage Determination Commission, that they had received the demands and proposals of the two presidents, and said, “As the minister, I will convey the views I received from the labour unions to the table.”
However, Turkish Labour Confederation (Türk-İş) Deputy Chairman Ramazan Ağar reacted to Minister Işıkhan’s statement that ‘we are in talks with the parties’ in an interview with CNBC-e. Ağar said, ‘We are not at the table. No one has consulted with us. We remain at the same point; we will not attend the commission meetings.’ Türk-İş President Ergün Atalay also stated that they would not attend the commission’s second meeting.
Debt trap: Global debt hits record high of $346 trillion
While global total debt reached a historic peak of $346 trillion, rising interest rates and increasing uncertainty are weighing heavily on the debt burden in both developed and developing countries, with the United States and China accounting for the largest share.
According to the International Finance Institute’s (IIF) ‘Global Debt Monitor’ report, global total debt rose to approximately $346 trillion in the third quarter of this year. Total global debt increased by more than $26.4 trillion in the first three quarters of this year. The ratio of total debt to global GDP reached 310 per cent during this period. Largely due to the impact of public borrowing, debt in both developed and emerging markets reached new records.
After the US, the country with the most debt is China, with approximately $64.2 trillion, while the debt of this country, which has the world’s second-largest economy, accounts for 19.13 per cent of total global debt. Japan, the world’s fourth-largest economy, ranks third among the most indebted countries with a debt of $24.5 trillion. The country’s debt accounts for 7.09 percent of total global debt. The United Kingdom and France rank fourth and fifth with a debt of $14.86 trillion and a 4.30 percent share.
Last year, while developing countries spent $1 trillion on net interest payments on public debt, 61 countries allocated more than 10 per cent of their government revenues to these payments.
Moody’s Turkey forecast: 3.4% growth, 22% inflation in 2026
International credit rating agency Moody’s has forecast that, following 3.2% growth in 2025, the Turkish economy will grow by 3.4% in 2026 and 3.5% in 2027.
Moody’s published its Global Structured Finance Report, which shares its economic growth and inflation forecasts for G20 countries. Moody’s forecasts that inflation in Turkey will reach 35 per cent in 2025, with a margin of plus or minus 2 per cent, and that this rate will decline to 22 per cent next year and 18.5 per cent in 2027.
The agency forecasts that the US economy will grow by 2 per cent this year, followed by 1.8 per cent in 2026 and 1.9 per cent in 2027, while its economic growth forecast for the Eurozone is 1.1 per cent for this year, 1.3 per cent for next year and 1.4 per cent for 2027. Moody’s forecasts that the Chinese economy will grow by 5 per cent this year, 4.5 per cent next year and 4.2 per cent in 2027, while its growth forecasts for India are 7 per cent this year, 6.4 per cent in 2026 and 6.5 per cent in 2027.
Deutsche Bank: Our inflation forecast for 2026 is 24 per cent
Deutsche Bank Turkey Economist Yiğit Onay stated on CNBC-e that demand conditions exceeding expectations have slowed the disinflation process, adding that inflation expectations for 2026 are around 24%. Onay said, ‘We expect the Central Bank to cut interest rates by 100 basis points at each meeting in 2026.’
The artificial intelligence and technology bubble is the biggest risk for 2026
In Deutsche Bank’s global market survey, in which financiers worldwide participated, the ‘artificial intelligence and technology bubble’ was seen as the biggest risk for 2026. When asked, ‘Which of the following poses the greatest risk to market stability in 2026?’, 57 per cent of respondents answered ‘a decline in technology valuations and waning enthusiasm for artificial intelligence’. Concerns about artificial intelligence and technology valuations surpassed all other risks to market stability next year.
Twenty-seven per cent of participants highlighted the risk that the new chair of the US Federal Reserve (Fed) could ‘push for aggressive interest rate cuts, potentially causing turmoil in the markets,’ while 22 per cent viewed the possibility of a ‘capital market crisis’ as a significant risk.
Employment losses continue in the industry
While the number of salaried employees increased by 1 per cent year-on-year in October, the industry experienced a 3.5 per cent decline. Compared to the previous month, there was a loss of 153,000 salaried employees in October. According to TÜİK statistics on salaried workers for October, the total number of salaried workers in the manufacturing, construction, and trade-services sectors increased by 1.0 per cent in October compared to the same month of the previous year. The number of salaried employees was 15,860,031 in the same month of the previous year, while it was 16,020,394 in October 2025. Looking at the breakdown of salaried employees, in October 2025, the number of salaried employees decreased by 3.5 per cent annually in the industry sector, increased by 6.2 per cent in the construction sector, and increased by 2.5 per cent in the trade-services sector.
Purchasing power in Turkey is below that of Europe
Turkey’s gross domestic product (GDP) per capita index value, according to the ‘Purchasing Power Parity’ (PPP), was 72. This figure was 28 per cent below the EU average. According to TurkStat’s ‘Purchasing Power Parity’ data for 2024, the GDP per capita index value, according to the PPP announced by the European Union Statistical Office (Eurostat), was 100 units on average for 27 European Union (EU) countries, while it was 72 units for Turkey, 28 per cent below the EU average.
The comparisons covered 27 EU member states, 3 European Free Trade Association (EFTA) countries (Switzerland, Iceland and Norway), and 6 candidate countries (Turkey, North Macedonia, Montenegro, Serbia, Albania and Bosnia and Herzegovina). Among these 36 countries, Luxembourg had the highest GDP per capita index according to the SGP at 245, while Bosnia and Herzegovina had the lowest at 35. Luxembourg’s GDP per capita index was 145% above the EU average, while Bosnia and Herzegovina’s was 65% below.
The decline in housing prices has ended, and sales have slowed
The 21-month real decline in housing prices, driven by high interest rates, ended in November. The rate of increase in housing prices exceeded inflation in November. On the other hand, housing sales slowed in November. Nationwide, housing sales fell by 7.8 per cent in November compared to the same month last year, reaching 141,100. In October, 164,306 homes were sold. Meanwhile, according to TÜİK data, construction output rose by 28.0 per cent year-on-year in October but fell by 0.1 per cent month-on-month.
3.2 billion lira in GSS premium debt to be written off
With the enactment of the bill known to the public as the 11th Judicial Package, 3.2 billion lira in unpaid general health insurance premium debt dating back to before 1 January 2016 will be written off. The regulation is expected to become law before the new year.
Fitch downgrades Vestel’s credit rating
Fitch Ratings downgraded Vestel Elektronik’s long-term and long-term local currency IDR ratings from ‘B-’ to ‘CCC+’.
Fitch also predicted that Vestel would struggle to continue refinancing its debt and improve its business model without clear evidence of a near-term recovery in demand and margins.
Pegasus orders LEAP-1B engines for its Boeing 737-10 fleet
Pegasus Airlines has signed an agreement with CFM International for up to 300 LEAP-1B engines to power its Boeing 737-10 fleet. Pegasus Airlines CEO Güliz Öztürk said, ‘We are extremely satisfied with the operational performance of the LEAP engine family and aim to bring the same performance and operational stability to our Boeing 737-10 fleet.’
The agreement will also contribute to the delivery of Boeing 737-10 aircraft, announced in December 2024, which is Pegasus Airlines’ largest aircraft order to date.
Global coal consumption peaks
According to the International Energy Agency, global coal consumption has peaked. The agency’s annual coal report indicates that global coal demand is expected to increase by 0.5 per cent this year, reaching a record level of 8.845 billion tonnes. However, the report points to a 3 per cent decline in demand by 2030.
SpaceX’s IPO benefited Musk, making him the first person to exceed $600 billion in net worth
Tesla CEO Elon Musk has become the first person in history to exceed $600 billion in net worth, according to Forbes’ global billionaires list. This increase is driven by reports that SpaceX could go public with a valuation of approximately $800 billion or even higher.
Musk’s stake in SpaceX accounts for more than a quarter of his fortune, and he is estimated to own approximately 42 per cent of the company.
SpaceX’s planned IPO at the end of 2026 will be the largest in history. The company’s market value is estimated at $1.5 trillion on the IPO date. The IPO is expected to raise $30 billion. Saudi Aramco’s IPO raised $29.4 billion.
The West has its eyes on Russia’s reserves, while Moscow is filing lawsuits
Ukraine is moving towards peace. The current debate is about the country’s development and reconstruction using Russia’s seized reserves… Russia, meanwhile, is filing a lawsuit over the frozen assets. The Russian Central Bank has announced that it will file a lawsuit in a Russian arbitration court to compensate European banks for the losses incurred due to the frozen assets.
Kirill Dmitriev, Russian President Vladimir Putin’s special representative for international economic cooperation, stated that European Union bureaucrats had made a mistake regarding Russian assets, saying, ‘Russia will win in court and get its reserves back.’
Unemployment is high in the US, and inflation rises below expectations
The US unemployment rate rose to 4.6 per cent in November, above expectations, putting pressure on the dollar and bond yields while pushing gold prices higher. The November rate is the highest since September 2021… Unemployment was 4.4 per cent in October.
On the other hand, inflation remained below expectations. The Consumer Price Index rose by 0.2 per cent monthly and 2.7 per cent annually in November. Core inflation in the country also increased by 2.6 per cent annually, below expectations.
Trump tightens the screws, China announces support for Venezuela
China has sent a message of support to Venezuela, the South American country that the US has blockaded by banning all oil tankers subject to sanctions from entering and leaving the country. The statement noted that China and Venezuela are strategic partners and that mutual trust and support are part of the tradition of bilateral relations.
US President Donald Trump, meanwhile, ordered in a midweek statement that all oil tankers subject to sanctions entering and leaving Venezuela be ‘blockaded’.
Despite the US move to cut off Venezuela’s critical oil flow, there has been no significant change in oil prices, with Brent crude for February delivery trading around $59 a barrel.
Japan raises interest rates to the highest level in 30 years
The Bank of Japan (BOJ) unanimously raised its short-term interest rate from 0.50 per cent to 0.75 per cent at its latest meeting. The bank, which raised interest rates for the first time since January, has now pushed interest rates in Japan to their highest level since 1995.
Trump Media signs $6 billion fusion deal
US President Donald Trump’s company, Trump Media & Technology Group, announced that it has signed a merger agreement worth more than $6 billion with fusion energy company TAE Technologies. The agreement, based entirely on shares, aims to establish one of the world’s first publicly traded fusion companies.
It was stated that this company aims to select the location for the first public-scale fusion energy plant and begin construction in 2026.
The US government has partnered with 24 companies for artificial intelligence
The US Department of Energy announced that it has signed cooperation agreements with 24 companies, including Google, Microsoft, Nvidia and OpenAI, for the ‘Genesis Mission’ launched to promote innovation using artificial intelligence.
US President Donald Trump signed an executive order in November launching the federal initiative called the ‘Genesis Mission’ to promote innovation using artificial intelligence.
Trump took an important step towards selling the Nvidia H200 to China
The Trump administration has initiated an intergovernmental formal review process for the sale of Nvidia’s H200 artificial intelligence chips to China. According to a Reuters report citing five different sources, this move is seen as the first concrete development in Trump’s promise to allow chip sales to China.
Huge investment from Nvidia to Israel: 10,000 people to be employed
It has been announced that Nvidia, the world’s most valuable technology company, will invest billions of dollars in Israel to build a facility that will employ 10,000 people. It was reported that, in addition to this facility, the company will build one of the largest data centres in the Middle East on another 30,000 square metre site.
Beef prices hit record levels in the US
Beef prices in the US rose 15 per cent year-on-year in November, reaching $6.8 per kilogram (291 TL). Despite the Trump administration’s efforts to increase imports and support domestic producers, the rise in prices cannot be stopped.
Signs of a slowdown in the Chinese economy continue
The loss of momentum in production, consumption and investment in the Chinese economy continued in November. Fixed capital investments fell by 2.6 per cent in 11 months compared to the same period last year.
Other news of the week in brief:
- The World Bank will provide €1.5 billion in financing to increase access to finance for small businesses in Turkey.
- Labour and Social Security Minister Vedat Işıkhan announced that 1,000 contract staff will be hired by the Social Security Institution (SGK). There will be no interviews for the recruitment process, and appointments will be made by the Student Selection and Placement Centre (ÖSYM).
- Short-term external debt rose to $226 billion. The short-term external debt stock, which shows debts with a maturity of one year or less regardless of their original maturity, rose to $226 billion.
- Medicine prices have increased. The Euro exchange rate for medicine prices was increased by approximately 17 per cent and set at 25.3346 TL.
- Foreign investors purchased 26.3 million dollars worth of shares and 339.6 million dollars worth of bonds during the week of 12 December.
- Annual inflation in the Eurozone was 2.1 per cent in November, below market expectations. Prices in November increased by 2.6 per cent in Germany, 0.8 per cent in France, 1.1 per cent in Italy and 3.2 per cent in Spain compared to the same month last year.
- Billion-dollar deal for Alzheimer’s drug. South Korea’s Adel signed a deal worth up to $1.04 billion with France’s Sanofi to develop an Alzheimer’s drug.
- Ford announced that it has shelved some major electric vehicle projects due to lower-than-expected demand and rising costs. The company will focus on hybrid and more affordable electric models in the coming period.
- Germany to arm itself with record debt. It has been reported that the German federal government will raise a record 512 billion euros next year by selling bonds to modernise infrastructure and the armed forces.
- TikTok is transferring its US operations to American investors. TikTok has signed an agreement to continue its US operations under a new venture controlled by American investors. The agreement is expected to be finalised in early 2026.
- The Bank of England cut its policy rate by 25 basis points to 3.75 per cent, in line with expectations. Annual inflation in the UK fell to 3.2 per cent in November, below market expectations.