The national debt of Turkey is the entire stock of direct, fixed-term, contractual, financial obligations of the state of the

Republic of Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...

that are outstanding on a particular date.

Government debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...

includes domestic and foreign liabilities, such as

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...

and money deposits, securities other than shares, and loans. It is the gross amount of government liabilities reduced by the amount of

equity Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...

and

financial derivative In finance, a derivative is a contract that ''derives'' its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying". Derivatives can be u ...

s held by the government. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

. See
Central government debt, total (% of GDP) for Turkey

Federal Reserve Bank of St. Louis The Federal Reserve Bank of St. Louis is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, D.C., make up the United States' central bank. Missouri is the only state to have two main Federal Reserve Banks (Ka ...

Domestic debt

At the end of 2017, the total, gross state-debt of Turkey stood at approximately TL954 bn (appr. $221 bn), equivalent to about 30% of GDP.April 2018 Treasury Report
Undersecretariat of Treasury, TurkeyThe Turkish Treasury calculates Turkish Lira (TL) equivalents of debt stock amounts from original, foreign currencies on the basis of the selling rate at the relevant end of period. See
Debt Management Reports
Treasury, p. 13 After deducting the net

asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...

s of the

Central Bank of Turkey The Central Bank of the Republic of Turkey, CBRT ( tr, Türkiye Cumhuriyet Merkez Bankası, TCMB, literally "The Turkish Republic Central Bank") is the central bank of Turkey. Its responsibilities include conducting monetary and exchange rate pol ...

, public-sector deposits, and the net assets of the unemployment insurance funds, the total, net state-debt of Turkey stood at approx. TL262 bn (approx. $60 bn), representing 8% of

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is often ...

.Turkish 2017 GDP was TL3.1 tr ($722 bn). See: April 2018 Treasury Report.

Foreign debt

At the end of December 2017, the gross, foreign-currency denominated debt of the Turkish state stood at $453.2 bn (about 53% of GDP), while Turkey's net foreign debt was $291.2 bn (about 34% of GDP). Loans guaranteed by the Turkish Treasury stood at $13.8 billion during the same period. In February 2018, the country's foreign-currency reserves stood at the equivalent of $114.5 bn.

Concerns

While some analysts, in the recent past, have dismissed concerns about Turkey's "debt problem" as "alarmist" and based on "fallacies,""Countries all around the world have been issuing massive volumes on government debt for years – some with high rates of

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...

(Turkey) and others with low rates of inflation (

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

) – without any problem of “funding” at all. The reason is that the deficits, after all, provide the funds that the Government borrows back!" :from Mitchell, William (2009)
D for debt bomb; D for drivel
in March 2018, citing concerns about the country's large, external-financing needs and a "deteriorating political climate", financial analysts

Moody's Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides international ...

downgraded Turkey's debt to Ba2 from Ba1, with "a stable outlook." Their report suggested the "possibility of a sudden, disruptive reversal in foreign capital inflows, a more rapid fall in already inadequate oreign exchangereserves and, in a worst-case scenario, a

balance of payments In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a ...

crisis." In April 2018, the

Turkish Industry and Business Association TÜSİAD, the Turkish Industry and Business Association ( tr, Türk Sanayicileri ve İş İnsanları Derneği), is Turkey's top business organization. Founded in 1971, TÜSİAD is a voluntary, independent, non-governmental organization dedicated ...

chairman stated that the country "should leave the course of economic growth based on

consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...

and foreign loans," recalling that Turkey's foreign debt stock "now exceeds 53% of its

GNP The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...

." Turkey's Deputy Prime Minister

Mehmet Simsek Mehmed (modern Turkish: Mehmet) is the most common Bosnian and Turkish form of the Arabic name Muhammad ( ar, محمد) (''Muhammed'' and ''Muhammet'' are also used, though considerably less) and gains its significance from being the name of Muha ...

stated that the national currency's "depreciation has made the economy

ore Ore is natural rock or sediment that contains one or more valuable minerals, typically containing metals, that can be mined, treated and sold at a profit.Encyclopædia Britannica. "Ore". Encyclopædia Britannica Online. Retrieved 7 April 2 ...

competitive, and that "the worst for the Turkish Lira is now over." Analysts warned of a "systemic risk" on account of the weakening of the Lira against the

U.S. Dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

and the

Euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...

, and the growing amount of corporate, foreign-currency debt,About 80% of corporate debt is held by domestic banks which has "more than doubled since 2009."

Financial markets

As of 2018, Turkey's

bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemical ...

market, trading in the

local currency In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community curren ...

, is the 6th largest among emerging market countries.See also
Recent trends in Emerging Market Economies government debt volume and composition

Bank of International Settlements The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work thr ...

, 2017 At the end of 2009, the corporate-bond market in Turkey amounted to TL481 million (US$340million), going up to TL1.4 billion5 (US$1.9 billion) by 2010 and to TL4.3 billion at the end of 2011.Turkey: bonds

Cbonds Cbonds is a financial market data vendor covering global bonds, equities and ETFs. Cbonds core business is to provide the financial market data via website Cbonds.Com as well as API solutions and mobile application. Since 2018 the global headqu ...

By 2017, the market totaled approximately TL18 bn ($5.2 bn), although a series of corporate defaults and restructurings has somewhat "dampened investor appetite." The average

coupon In marketing, a coupon is a ticket or document that can be redeemed for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in r ...

rate on corporate debt issued between 2015 and 2017 was 12.1%, compared with 11.1% on short-term deposits and 10.4% for 2-year government bonds. The Turkish Eurobond market opened in early 2011, and banks and corporate entities were allowed to issue Eurobonds directly, without paying

withholding tax Tax withholding, also known as tax retention, Pay-as-You-Go, Pay-as-You-Earn, Tax deduction at source or a ''Prélèvement à la source'', is income tax paid to the government by the payer of the income rather than by the recipient of the income ...

es on interest payments under the bonds.

Notes

References

{{reflist

External links

Turkey fact sheet

OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...

, 2017

Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...

Finance in Turkey