Turkey’s Treasury and Finance Minister Mehmet Şimşek announced that the government has achieved approximately 484 billion Turkish lira (around $10 billion) in public-sector savings for the 2024-2025 period. This amount, he noted, surpasses the combined 2026 budgets of six key ministries: Environment, Urbanization and Climate Change; Foreign Affairs; Energy and Natural Resources; Culture and Tourism; Industry and Technology; and Trade.

These savings are attributed to austerity measures introduced under the Treasury’s leadership, which include tightened expenditure controls and budget cuts across various areas excluding essential sectors like earthquake response. The measures encompass a broad range of public sector expenses, including the use of vehicles, service buildings, fixed assets, and energy consumption. An enhanced monitoring and enforcement system has been implemented, requiring 260 public administrations to input data and generate reports on their austerity practices.

The share of budget expenditures under the austerity circular, excluding interest payments and earthquake-related spending, declined notably from a long-term average of 4.6% to 3.1% in 2024 and is projected to fall further to 2.9% in 2025. This trend reflects efforts to maintain fiscal discipline, which Şimşek emphasized as a top priority amid Turkey’s ongoing economic management.

In addition to these savings, the government’s sliding-scale system, introduced earlier this year to limit increases in energy prices, is expected to result in revenue losses estimated at 372 billion lira by the end of 2024. However, according to officials, the savings generated through austerity measures more than offset these losses, providing additional fiscal space.

Şimşek previously indicated that Turkey anticipates its annual budget deficit will narrow to approximately 2.5% of gross domestic product (GDP) as of June 2024, down from a projected 2.9% for the full year. The minister emphasized that the government plans to continue applying stringent spending controls and savings policies to redirect resources toward priority sectors and support a broader disinflation process within the economy.

The government’s approach combines stricter oversight and targeted reductions with a focus on efficiency and resource allocation. While the austerity measures exclude critical emergency expenditures, the overall fiscal tightening marks a notable step in Turkey’s efforts to stabilize public finances.