Türkiye | Quarterly Debt Report. Third quarter 2024

Summary

The overall total FX position of the economy worsened in the third quarter of the year. Public sector’s short position declined whereas private sector’s long position deteriorated somewhat.

Key points

• Key points:
• The low level of household indebtedness to GDP ratio continues. Debt to GDP ratios started to decline in consumer credit cards as well although still having a higher share among other retail liabilities of consumers.
• Shortening in the maturities of retail loans and still ongoing preference for credit cards accompanied by high interest rates might keep pressure on NPL inflows. Yet, we expect the latest regulation allowing restructuring up to 5 years to help decelerate the pace in the next months.
• FC debt to GDP ratio of corporates moves up, resulting in a deterioration of corporates’ FX short position. The short-term net FX position of corporates declined to its lowest level since Dec18.
• The NPL ratios in GPL & credit cards and the recent pick up seen in SME segment require attention in terms of financial stability, taking into account the upcoming deceleration in the economic activity.

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