Macro and Politics
Tacirler Investment
* The Treasury and Finance Ministry will release March central government budget figures @ 11:00 local time. In March, the Treasury recorded a cash deficit of TL298.4bn, bringing the cumulative cash deficit in the first quarter to a hefty amount of TL901bn. Moreover, the primary balance posted a deficit of TL162.9bn in March, while the cumulative primary deficit for the first three months amounted to TL483.7bn. Cash budget figures are indicative for today’s central government budget data. The persistent divergence between the accrual-based and cash-based budget frameworks remains notable. The substantial 1Q25 cash deficit of TL901bn underscores that elevated public expenditure continues to pose risks to the disinflation outlook. While we believe that weakness in cash-based budget performance may persist, a failure to observe fiscal consolidation in the coming period could amplify upside risks to growth. Please note that we have recently revised our 2025 budget deficit forecast upwards, from TL1.61tn (2.7% of GDP) to TL1.9tn (3% of GDP).
* The Treasury will hold 4y CPI-indexed bond auction as well as the direct sales of 1y USD-denominated bond & 1y USD-denominated lease certificate today, finalizing its domestic borrowing program for April. According to three-month (April – June 2025) domestic borrowing program, the Treasury has a domestic redemption of TL293.3bn in April, while in return it plans to borrow TL329.5bn in total throughout the month via six auctions and three direct sales. Having already raised TL201.7bn through domestic borrowing this month, the Treasury is likely to borrow around TL130bn via tomorrow’s auction and double direct sales.
* The CBT announced the February balance of payments statistics, revealing a USD4.4bn current account deficit, perfectly in line with our house estimate, while slightly higher than the median estimate of USD4.31bn of deficit. Accordingly, the annual deficit climbed from USD11.8bn to USD12.8bn. We expect the current account deficit to post a deficit around USD4.5bn in March and the annual deficit to widen further to USD13.2bn. Our Year-end current account deficit forecast is USD 22bn (1.5% of GDP).