Turkey’s central government gross debt stock edged down 0.2% m/m to TRY711bn (€214bn) as of the end of August, the country’s Treasury said on September 20. Debt stock was TRY678bn at the end of last year.
The main concern, however, is not the rising public debt but the fast expansion of the private sector's external debt. Leverage in the corporate sector has risen rapidly especially after the global financial crisis as the world’s major central banks pumped billions of US dollars into the system, making it easier for Turkish banks and firms to reach low-cost foreign funding.
The Treasury also said that domestic debt stock rose by 0.7% m/m to TRY458bn at the end of August, while external debt stock decreased by 1.7% m/m to TRY253bn.
Fitch Ratings announced on August 19 that it has affirmed Turkey's long-term foreign and local currency issuer default ratings (IDR) at 'BBB-', the lowest investment grade, but it downgraded the outlook to negative from stable.
Prolonged or deepened political instability, insecurity or geopolitical stresses that undermine economic performance or economic policy credibility; a materialisation of stresses stemming from external financing vulnerabilities, a reversal in the declining trend in debt to GDP ratio or a worsening of external imbalances could individually or collectively trigger a rating downgrade, Fitch warned.
| Turkish Central Government Debt Stock | |||
| ($ mn) | Domestic | Foreign | Total |
| Jan | 416,933 | 204,559 | 621,493 |
| Feb | 421,204 | 211,547 | 632,751 |
| Mar | 423,184 | 210,666 | 633,850 |
| Apr | 428,485 | 219,649 | 648,134 |
| May | 429,378 | 218,061 | 647,439 |
| Jun | 430,236 | 221,911 | 652,147 |
| Jul | 434,383 | 227,897 | 662,279 |
| Aug | 434,981 | 241,715 | 676,696 |
| Sep | 438,175 | 252,522 | 690,696 |
| Oct | 438,204 | 239,957 | 678,161 |
| Nov | 439,458 | 237,367 | 676,825 |
| Dec-15 | 440,124 | 237,565 | 677,689 |
| Jan-16 | 443,078 | 241,707 | 684,785 |
| Feb | 444,085 | 241,146 | 685,231 |
| Mar | 448,233 | 235,593 | 683,826 |
| Apr | 449,407 | 233,668 | 683,075 |
| May | 452,286 | 248,505 | 700,791 |
| Jun | 453,269 | 247,035 | 700,303 |
| Jul | 455,309 | 256,829 | 712,138 |
| Aug | 458,414 | 252,533 | 710,948 |
| source: treasury | |||
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