Türkiye | Quarterly Debt Outlook 2Q 2025

Summary

The overall total FX position of the economy improved in May25 compared to Dec24. The composition of external debt started to shift again between the public sector and the real sector.

Key points

• Key points:
• Household debt to GDP remains low at 9%; and it is one of the lowest among other EM peers. Due to tight financial conditions and macroprudential measures, exposure to mortgages remain low as well.
• Main assets of households remain to be deposits where the maturities in TL deposits shortened especially in 2Q25. Increasing size of money market funds with dollarization potential poses a risk to financial stability for the coming months.
• Retail credit cards and GPLs continue to accelerate, together with their NPL ratios. However, the pressure on this will be eased with the very recent restructuring decisions of the BRSA.
• Net FX short position of corporates has been deteriorating since the start of 2024; and worsened by 70% in May25 compared to Dec24, approaching the high levels seen in 2019. Their ST net long position ($8bn) reached also its lowest since 2016.
• External debt of banks is high, led by issuances. However, their FC liquidity buffers continue to be strong, and LT external roll-over ratios are high as well.

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