Examining the External Debt Problem of Turkey for the Period From 2001 to 2019

Abstract

The lack of domestic savings of low-income developing countries compels developing countries to go into external debt. External debt in developing countries can thus be defined as external sources that these countries receive from developed countries. High external debt of developing countries has led to the emergence of some external debt indicators. These indicators show the capacity of the country receiving the external debt to pay back the debt that is repayment capacity. Some of these indicators, which are among the financial fragility index, include the external debt to GNP ratio, the debt to exports ratio, the debt service to exports ratio, the debt interest service to exports ratio, the international reserves to external debt ratio, and the international reserves to short-term external debt ratio. External debt is one of the most important economic problems facing Turkey as a developing country. The share of the private sector in Turkey in both short-term and long-term external debt has increased more than the share of the public sector and the Central Bank of the Republic of Turkey in external debt during the last decade. Against this background, the chapter aimed to examine the external debt of Turkey in the period from 2001 to 2019 using the external debt data available in the Electronic Data Delivery System of the Central Bank of the Republic of Turkey and the World Bank World Development Indicators (WDI) and offer policy recommendations on external debt management. © Peter Lang GmbH Internationaler Verlag der Wissenschaften Berlin 2020. All rights reserved.