Macro and Politics

* The Treasury cash balance posted a surplus of TL49.8bn in August, while the primary cash balance recorded a surplus of TL209.6bn. The Treasury cash balance provides an early indication of the August central government budget figures, due to be released on September 15. As a reminder, the central government budget had posted a TL114.2bn surplus in June, largely driven by base effects stemming from deferred tax collections and temporary tax payments, before swinging back into deficit in July as these effects faded and budget expenditures rose sharply. Accordingly, the cumulative central government budget deficit reached TL1.3tn in Jan–Jul, corresponding to 48.7% of the TL2.7tn full-year deficit target for 2026. On a trailing 12-month basis, the cumulative budget deficit widened to TL2.1tn from TL1.8tn. We forecast the 2026 year-end budget deficit at TL2.8tn, equivalent to 3.3% of GDP.