Turkey External Debt as a % of GDP Highlights in 2020
Turkey’s external debt as a % of GDP hit 60.5% in 2020, an increase of 4.9% over the previous year. Between 2010 to 2020, Turkey’s external debt as a % of GDP increased by 69.9%.
According to the IMF, the country’s gross government debt is expected to increase from 36.8% of GDP in 2020 to 37.1% of GDP in 2021 because of the continued borrowing by the government. In absolute terms, the government’s gross debt is forecast to rise from $264.5 billion in 2020 to $294.8 billion in 2021. The debt incurred on COVID-19 relief will lead to a large government debt account in terms of GDP. Turkey is required to address the problems associated with its increasing level of external debt, which makes the economy vulnerable to external events. According to the Treasury and Finance Ministry in Tin Turkey, total gross external debt stock reached $431 billion at the end of March 2020. By Q1 2021, the total external debt stock had increased to $448 billion, out of which the private sector accounted for $253 billion.
Outlook on Global Economy
Real GDP is measured using inflation-adjusted base year prices. Real GDP changes are a measure of economic growth and show whether there has been an increase or decrease in the volume of economic activity.
According to real GDP, the world's top five economies are the United States, China, Japan, Germany, and India. After the US, China had the largest real GDP in 2021 with a value of $12.7 trillion in 2021. With a $6 trillion real GDP during the same period, Japan came in third place globally. Germany and India are the other two largest leading economies, with real GDPs of $3.8 trillion and $2.9 trillion, respectively.
Factors Affecting the Global Economy
A rise in COVID-19 cases:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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