Government expenditure is set to rise to $138bn (£74bn) in 2007, which would result in a budget deficit of $11.2bn.
Reports suggest the International Monetary Fund (IMF) exerted pressure on Turkey to trim its spending plans.
Finance Minister Kemal Unakitan said the budget was "disciplined" and not driven by political considerations.
Unveiling the draft budget to parliament, Mr Unakitan said the economic programme would help foster the country's "development and stability".
He said: "This is not an election budget. This budget was prepared in line with the realities of the country and in a way that will increase welfare."
The government raised its initial $128bn spending target because of rising energy costs and a higher pay settlement for civil servants.
But the IMF, which helped Turkey back on its feet following an economic crisis in 2001, is reported to have tried to limit the rise in expenditure.
Turkey's economy has recovered strongly in the past three years as previously rampant inflation has been brought under control.
But the country has a large social security deficit, and health and welfare spending is projected to account for about 15% of the total budget.
Financial analysts said Turkey, which wants to join the European Union and began entry talks last year, must maintain a disciplined approach to spending if it was to retain the confidence of investors.
"If there is slippage due to elections, the markets will react to this," said Erkin Isik, an economist at Fortis Bank.
In a separate development, the Organisation for Economic Co-operation and Development (OECD) said Turkey must improve its corporate governance if it was to be realistic about joining the EU.
In a report, the Paris-based think-tank said Turkey had made progress in how its stock markets were regulated, but that watchdogs needed to be made stronger and more independent.