Turkey’s external debt reaches $500 billion

Turkey’s external debt has soared to a staggering $500 billion by the end of 2023, marking a record high for the nation. This substantial increase has also pushed the ratio of external debt to gross domestic product (GDP) up to 44.7 percent.

The Ministry of Treasury and Finance reported that Turkey’s gross external debt stock had reached $499.886 billion as of December 31, 2023, with an increase of $18.5 billion in the last quarter alone and $41.9 billion throughout the previous year. Notably, over the 21 years of the AK Party era, Turkey’s gross external debt stock has skyrocketed by $368 billion from $131.8 billion in 2002.

Breaking down the $500 billion gross external debt, $202.5 billion belongs to the public sector, $46.4 billion to the Central Bank, and $251 billion to the private sector. In the past year, the gross external debt of the private sector rose by approximately $12 billion, while the Central Bank’s debt burden increased by $14.4 billion and the public sector’s burden by approximately $16.2 billion.

SHORT TERM EXTERNAL DEBT İNCREASES BY $26.6 BILLION IN 2023

The ratio of gross external debt to GDP stands at 44.7 percent, while the net external debt is at 23.4 percent. Turkey has faced challenges with external resources, particularly with a notable increase in short-term debt. Long-term external debt stock increased by $15.3 billion in 2023 compared to the previous year, while short-term external debt rose by $26.6 billion.

Looking at the government’s financial situation, the EU-defined general government debt stock amounted to 7 trillion 751 billion Turkish Lira. The net public debt stock was 5.6 trillion Turkish Lira, with the ratio of debt stock to GDP calculated at 21.2 percent.

TURKEY TO PAY $80.488 BILLION FOR DEBT REPAYMENT IN 2024

In terms of debt repayment, Turkey is set to pay off a substantial amount in 2024, totaling $80.488 billion. Approximately $30 billion of this repayment will be covered by the public sector, while the private sector will handle payments totaling $50.5 billion. Of the external debt to be repaid, $68.3 billion constitutes the principal amount, with $12.1 billion in interest. Short-term borrowings account for $22 billion of this year’s debt repayment. Looking ahead, a total of $53.1 billion in external debt payments are scheduled for the following year. (SÖZCÜ)