Page 24 - Turkey Outlook 2025

Moody’s will release its Turkey reviews on January 24 and July 25. Fitch is scheduled to review Turkey’s ratings on January 31 and July 25
while S&P has put pins for April 25 and October 17 on the calendar. Fiscal comedy
Finance Minister Mehmet Simsek’s talk of fiscal tightening continues to do its job when it comes to market sentiment.
In April, following the local polls held on March 31, the finance industry raised some concerns over Simsek’s budget metrics.
In response, Simsek on May 13 held a press conference to release a “savings package” that was supposed to cut budget spending. He also gave a Powerpoint presentation.
bne IntelliNews noted: “The Erdogan regime is, however, not in a position to cut its spending. It has long-term contracts for mega-infrastructure projects and, what’s more, is among the most corrupt governments in the world.”
“Nevertheless, there are officials who indulge in accounting tricks with the budget figures that are coupled with fake GDP numbers to help cut the budget deficit to GDP ratio,” it added.
In his new medium-term economic programme (OVP) released in September, Simsek cut his budget deficit target for 2024 to 4.9% of GDP from the previous 6.4% of GDP. He also pencilled in a 3.1% budget deficit target for 2025.
Turkey’s government has provided $153bn in income guarantees to public-private-partnership (PPP) projects, including $78bn for city hospitals (to be paid from 2021 to 2045), $35bn for the Akkuyu nuclear power plant (NPP) project (2021-2035) being built by Russian contractors, $32bn for highways and bridges (2021-2042) as well as $7bn for airports (2021-2042), according to calculations made by Ugur Emek of Baskent University.
“Defence” expenditures remain a field rife with thievery. The regime budgeted a record $47bn for defence and security in 2025. It is a matter of patriotism. You do not question this spending unless you are a traitor.
Palace and “representation” expenditures continue undeterred too.
Debt rollovers
The Erdogan regime has full control on the central bank. So, lira debt rollovers are not an issue for the regime and its businessmen.
24 Turkey Outlook 2025 www.intellinews.com