Declining Share of Investments in Municipalities and the Impact on Economic Growth
It was emphasized that the investment shares of municipalities in the Turkish economy are declining, and the critical role of metropolitan cities in economic growth must be supported by investments.
It was stated that the investment shares of municipalities within the budget are melting away, that metropolitan cities such as Istanbul, Ankara, and Izmir play a critical role in economic growth, and that recent political mobility should pave the way for investments.
Economic Growth and the Role of Cities
The Turkish economy recorded a growth rate of 3.7 percent last year, and sustaining growth while aiming to reduce inflation is of great importance.
While evaluating the economy, political traffic focused on Ankara is often discussed, whereas the infrastructure needs of cities and the role of municipalities in the economy can be overlooked.
Economic Share of the Three Metropolitan Cities
Istanbul, Ankara, and Izmir carry 45 percent of the Turkish economy, and approximately 45 liras of every 100 liras of value added produced originate in these three cities.
A slowdown in transportation lines, infrastructure investments, or licensing processes in these cities directly brakes the Turkish economy as a whole.
Budgets Grow While Investments Melt
According to General Activity Reports of Local Administrations and TURKSTAT data, 24.4 percent of municipalities' total expenditures of 1.3 trillion liras in 2024 was allocated to investments.
In 2025, total expenditures increased by 35 percent to reach 1.7 trillion liras, while investments remained at 331 billion liras with an increase of only 6 percent, causing the share of investment in the budget to drop to 19.1 percent.
Comparison of Investments with Past Years
While municipalities allocated 36.1 percent of their budgets to investments in 2018, this rate fell to 23.9 percent in 2019, and investments have never reached pre-2019 levels again.
The picture indicating that the changing management approach in metropolitan cities after 2019 has weakened investment priorities cannot be ignored.
Contribution of Metropolitan Investments
While the Medium-Term Program targets 4.2 percent growth for 2027, municipal investments to be made in Istanbul, Ankara, and Izmir must actively contribute to growth.
If investment expenditures in the 2025 budget could have been kept at the 24 percent level, local administrations would have made 92 billion liras more in investments.
Political Mobility and the Need for Investment
While Ankara Metropolitan Municipality Mayor Mansur Yavaş resigned from his party, Izmir Metropolitan Municipality Mayor Cemil Tugay joined the AK Party.
What Turkey truly needs today is for this political mobility to pave the way for pending investments in cities and for local administrations to assume an active role in the economy.