Blame the private sector for the increasing foreign debt!
look at the foreign debt for the annual LET’S period.
Let us immediately state what the defense will be when it is said that the foreign debt has increased tremendously in these twenty years. “External debt has increased, but the public debt has not increased that much, the hike is due to the private sector,” will be the answer. It’s almost like the private sector’s debt is not our problem!
If there is someone, who believes this in the government, they do not even understand the “e” of the economy, let alone the economy!
No, if there are people who say this without believing, they are not telling the truth.
FROM USD 132BN TO USD 459BN
Turkey’s external debt stock was USD 132bn at the end of 2002. Twenty years have passed, and we saw 2022, and the foreign debt stock is at USD 459bn now.
The debt stock has increased by 248% and USD 327bn in two decades.
The debt of the public sector increased by USD 122bn, the debt of the Central Bank increased by USD 11bn, and the debt of the private sector increased by USD 194bn in 2003-2022.
But when we go into detail on the debtor basis, the defense mechanism I mentioned a little while ago comes into play:
“It is the private sector with increasing debt, let them think!”
I wish it was! I wish only the debtor was kept responsible for the debt it has! Unfortunately, that’s not the case with foreign debt.
The foreign currency debt of domestic company A to domestic company B does not matter. That currency changes hands domestically. Even if there is a demand for foreign currency, that currency remains inside. Of course, if the creditor company takes that foreign currency abroad later, the situation changes, but that is not our subject.
But if the situation is different… If the debt of company A in the country is to a company or bank abroad... This is what is happening now. The debt is owed to companies or banks, but essentially abroad.
Here, the company with foreign debt has to somehow find foreign currency when the debt comes due. If that debt can’t be covered with new borrowing, foreign currency will be found and bought, either from the bank or the free market. I hope no one thinks that the recent foreign exchange demand comes entirely from the savers.
USD 67BN TO BE PAID IN 11 MONTHS
The data included in the foreign debt payment projection of the Ministry of Treasury and Finance are for the February-December period, and the total external debt to be paid in these 11 months is USD 67bn. Of this amount, approximately USD 56bn is principal, and USD 11bn is interest. Of the USD 67bn payment in 11 months, USD 42bn will be made by the private sector, and USD 25bn will be made by the public sector.