Türkiye | Quarterly Debt Outlook. 1Q_2026

Summary

Debt sustainability metrics remain strong across sectors. However, signs of stress are gradually emerging through rising retail NPLs and an overall weakening net FX position.

Key points

• Key points:
• Household indebtedness remains among the lowest in emerging markets relative to GDP, supported by continued macroprudential restrictions on consumer lending.
• Following a temporary stabilization driven by restructuring measures, NPL volumes in both general-purpose loans (GPLs) and credit cards have resumed their upward trend. The GPL NPL ratio has already returned to levels close to its historical highs.
• Commercial NPL ratios are still at historically low levels. However, weaker export receivables became a key driver of the deterioration in the corporate sector’s net FX position in 1Q26.
• On public debt, July-August will mark the peak of TL debt redemptions in 2026, while elevated borrowing costs are expected to feed more visibly into interest expenditures from 3Q26 onward.
• Türkiye’s overall net FX position weakened in 1Q26. While the deterioration in 4Q25 was primarily driven by the real sector’s widening FX short position, in 1Q26 the shift was concentrated on the public sector side, largely reflecting the decline in the CBRT reserves.

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