Türkiye | Quarterly Debt Outlook. First Quarter 2025

Summary

The overall total FX position of the economy deteriorated in 4Q24. Public sector’s short FX position continues to decline whereas private sector’s long position deteriorates due to the real sector.

Key points

• Key points:
• Household debt to GDP remains low at nearly 10%. Decline in housing loans ratio to GDP is still much sharper compared to other segments while deceleration in other segments also became more visible.
• The rise in overdraft accounts and general purpose loans continues to meet households’ short term financing needs however with a moderation compared to previous quarters. Yet, consumer credit cards maintain their momentum in early 1Q25.
• Increase in NPL ratios continues, albeit slowly. NPL ratio in commercial segment remains to be historically low.
• Real sector’s short-term net FX position fell to USD16bn by end 2024 compared to USD59bn in 2022. As of March, the CBRT decreased the monthly growth limit of FC credits to 0.5% from 1% by also narrowing the scope to only machinery & equipment purchases for investment loans exempted from the cap.
• A higher portion of banks’ external debt is ST (on a remaining maturity basis) which increased further in 4Q24, pointing out the need for longer-term external funding.

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