Turkey | Credit Allocation Productivity Gains and NPL Evolution

Summary

The allocation of resources to productive sectors is a factor that supports sustainable growth. Therefore, it is important to understand how the credit boost in recent years has been distributed among the sectors and whether those sectors also perform well in terms of productivity.

Key points

• Key points:
• Among main sectors, recent credit allocation shows a substantial increase in the industry, mainly led by the manufacturing sector in broad-based terms and backed by both banking groups.
• All main subsectors improve in productivity in recent years, where the construction sector took the lead (vs. its relatively low share in credit gains)
• NPL volume of the sector almost tripled in the last 5 years, where industry and services weighed more. If NPL ratios are considered, construction sector takes the lead in main subsectors, while leather is at the top under industry

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