Turkey's economic crisis is deepening

İlkcan Kemer

Arrests and political uncertainty have deeply affected the economy. Evaluating the economic picture, Finance Professor and faculty member Prof. Dr. Duran Bülbül stated, ‘Turkey’s debt has exceeded 38 trillion lira, and the public’s debt burden is becoming heavier’.

Recent arrests in Turkey, political developments, and especially the arrest of Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu, have caused sharp fluctuations in the economy. According to experts, unless structural reforms are implemented in economic management, the impact of the crises will continue to deepen.
Stating that Turkey’s total debt has exceeded 38 trillion lira, Prof. Dr. Duran Bülbül said that with the increase in foreign exchange rates, the public’s debt burden has increased even further. Emphasizing that the unstable decisions made by economic and political management have negatively affected the markets, Duran Bülbül made the following assessments:

“POLITICS HAS BECOME SIMPLISTIC: ‘THERE IS NO COMMON SENSE IN TURKEY!’

Before stating the economic and political reflections of the recent events in Turkey, we have once again seen that in Turkey, both the government and the opposition are not employing common sense for the future of the country and the economy. Setting aside the country’s interests, instead of clarifying and resolving events, there is an attempt to obscure current events, and we see that some media outlets, which claim to engage in investigative journalism and reporting, are contributing to this process by directing events toward unrelated individuals and individualizing them.

In other words, we see that the reason for the start of the event is no longer being discussed or that these processes are not being talked about, which is the most dangerous part. Political parties have even reached a position where, both the government and the opposition, instead of discussing certain problems in Turkey and the reasons for entering this process, create simplistic and degrading rhetoric such as, “that party does it and nothing happens; if we do it, something happens.” These discourses are seriously terrorizing the country and causing serious harm to the economy, the poor, the public, and the workers.

‘CENTRAL BANK RESERVES HAVE BECOME A BURDEN ON THE PUBLIC!’

Due to the crisis in the metropolitan city, the Central Bank’s reserves have been seriously eroded. A loss of 25 billion dollars has occurred due to recent crises.

Turkey’s external debt has reached the level of 528 billion dollars. Moreover, credit default swaps (CDS) have risen from the 220 level to the 350 level. This has created serious question marks in international markets regarding Turkey’s debt repayment capability.

Due to exchange rate increases, Turkey’s debt burden has increased by 1.5 trillion TL. As a result, an additional debt burden of approximately 19 thousand TL has been placed on each of our citizens. Our citizens will pay this debt through taxes, price hikes, and the rising cost of living.

Furthermore, the exit of foreign investors has accelerated, and domestic investors have begun to turn from TL to foreign currency. Losses in value in banks and borrowing costs have also increased. Due to the uncertainty in the market, interest rates have been indirectly increased, and interest rates are expected to be officially increased in April.”

‘THE COST OF THE ECONOMIC CRISIS IS BEING LOADED ONTO THE PUBLIC’

Stating that Turkey’s debt burden has increased by 1.5 trillion lira due to the economic fluctuations, Prof. Dr. Duran Bülbül emphasized that this situation will directly reflect on the citizen’s pocket and continued his words as follows:

“The segment most affected here has been households. While the total debt of households was 7 billion TL in 2002, this figure has reached 4.5 trillion TL today. This shows that the public in Turkey is living in a poor, impoverished, and indebted state, trying to roll over their debt with more debt.

The result of rolling over debt with debt, whether it is an individual, a company, or the state, is inevitably bankruptcy. The private sector is also one of the most indebted segments. Today, it has a debt of around 17 trillion lira. The external debt of banks has reached 4.8 trillion TL. Turkey’s total foreign currency-denominated debt is 19 trillion TL. This is a terrifying situation.

The political government must be purged of gang-like structures, remnants of religious communities, and interest groups that direct the economy. Law and justice must function, and necessary measures must be taken against corruption. Otherwise, political influences on the economy and fragility will continue, and the public’s burden will increase even further.”