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Turkey’s external debt hits record high of 62.8 pct of GDP in 2020

A currency exchange office worker counts Turkish Lira banknotes in front of the electronic panel displaying currency exchange rates at an exchange office in Istanbul, on August 6, 2020 as Turkey's lira set a new record low against the US dollar. (Photo by Yasin AKGUL / AFP)

Turkey’s external gross debt stocks, which amounted to $450 billion at end-2020, climbed to a record 62.8 percent of gross domestic product (GDP) at the end of last year, the Birgün daily reported on Thursday, citing data from the Treasury and Finance Ministry.

Statistics regarding Turkey’s foreign debt revealed the country’s worsening economy under Justice and Development Party (AKP) rule, Birgün said, underlining that Turkey’s external debt accounted for only 52.5 percent of GDP in 2018, even when it reached a record high of $467.6 billion.

Since the AKP took office in 2002, when Turkey’s external debt was $129.6 billion, accounting for 56.8 percent of GDP, the country’s external debt has surged by $320.4 billion, corresponding to a 247 percent increase over the past 18 years.

According to Birgün, the country’s foreign debt as a proportion of GDP, which rose from 37.5 percent in 2010 to 52.5 percent in 2018, also saw an increase of more than 10 points in the last two years.

Turkey’s GDP, which climbed to as high as $940 billion in 2014, dropped to $717 billion in 2020, as GDP per capita declined from around $12.000 to around $8.000 in the same period.

Some $173 billion of Turkey’s external debt is owed by the public sector, which owed $157.1 billion in 2019, seeing an increase of 10.2 percent within a year. In other words, the public sector was getting into more debt in order for the private sector to pay its debts, Birgün indicated.

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