An eye on foreign borrowing

Dunya Executive - - COMMENTARY -

Undersecretaries for the Treasury released the figures regarding foreign borrowing in 2017. With the figures from previous years, we formed 25 years of series. Here are the details in the foreign borrowing picture

►Foreign debt stock hit its highest level in history at the end of 2017, up to $435 billion. Both public and private debt were at historical levels.

►Public debt increased by 10 percent, or $13 billion, last year. Private sector debt rose by 11 percent, or $32 billion. Total debt increased

by 11 percent, or $45 billion.

►Foreign debt stock of the public sector rose by 191 percent in comparison with our base year 1993 – so it increased by $90 billion in the last 24 years. Private sector debt rose by 1,242 percent, or $293 billion. Total debt increased by 543 percent, or $383 billion.

►During the AK Party government between 2003-2017, public debt rose by 58 percent, or $50 billion and private sector debt rose by 634 percent, or $273 billion. Total debt increased by 250 percent, or

$324 billion.

►The foreign debt stock to GDP ratio reached 53.3 percent by the end of last year. This rate is the highest foreign debt-to-GDP ratio after 2002.

►Foreign debt to GDP was around 30 percent twenty-five years ago, peaking in 2001 and 2002. It then went down to 34 percent in 2005 and generally remained below 40 percent until 2012. This was thanks to a valuable TRY, making GDP relatively bigger in dollar terms.

►1994 was the year when public debt had the highest share in

foreign borrowing during the last quarter century. Three-quarters of the foreign debt in 1994 belonged to public sector and the remaining one-quarter was private sector.

►Public debt had a bigger share in debt until 2005. After that, public and private sector debt was 5050.

►Following that year, the private sector started to become indebted heavily while the rise in public borrowing was more modest. Only 30 percent of the total debt stock belonged to the public sector and 70 percent to the private sector.

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