Türkiye | Quarterly Debt Outlook. First Quarter 2024

The indebtedness of different agents remains below that of peers. The composition of external debt has been shifting among the borrowers since 2018. There is the increasing trend led by public, compared to the ongoing decline in the private sector.

Key points

• Key points:
• Household indebtedness is well below the peer countries’ levels. However, the significant growth in consumer credit card spending in recent years will be on focus for financial stability reasons.
• Indebtedness of corporates declines with the fall in their FC debt levels. Their debt to GDP ratio compared to peer countries remains also lower than the average of the peers.
• Net FX position of corporates has been declining significantly since March 2018, when it reached its record level of $195bn. After falling to its historical low deficit level of $76.5bn in Oct23, it has most recently started to increase and rose to $83bn in Jan24.
• Conversion from the FC protected deposit scheme ($71bn as of end Mar24) to the standard TL deposits remains key in order to well manage public accounts and strengthen the monetary transmission mechanism.
• Banks’ external borrowings (wholesale funding) have been declining since 2018. However, in 2023 banks’ bond issuances abroad started to gain pace again.

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