Türkiye | Quarterly Debt Outlook 2Q 2024

Summary

The ratio of household indebtedness to GDP remains low, although non-performing loans in credit cards are accelerating. Meanwhile, corporate foreign currency debt to domestic banks is rising, and both the corporate and banking sectors continue to roll over their external debt at high rates.

Key points

• Key points:
• Household debt to GDP hovers around 11%, with assets increasing due to valuation and currency effects, while the preference for consumer credit cards continues despite some deceleration.
• The net foreign exchange position of corporates increased to 102.5 billion dollars in April 2024, driven by foreign currency credits provided by domestic banks, while their short-term net FX position declined to 44.8 billion.
• The foreign currency share in public debt is decreasing, with public banks remaining the main borrowers of domestic public debt and Eurobond issuances driving external public debt.
• Banks' external loan roll-over ratios have moved upward since early 2023, reaching 127.6%, supported by an increase in debt issuances and repo funding that bolstered foreign exchange liquidity.

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