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Turkey faces alarming increase in public debt

Turkey’s public debt has swelled more than 40% over a year, adding to economic risks despite a relative recovery in the second half of 2020.
People pass in front of a crypto currency "Bitcoin Change" shop near the Grand Bazaar on December 17, 2020 in Istanbul. - Leading virtual currency bitcoin on 16 December traded above $20,000 for the first time following a sustained run higher in recent weeks. Bitcoin reached a record-high $20,398.50 before pulling back to $20,145, which was still an intra-day gain of nearly four percent. (Photo by Ozan KOSE / AFP) (Photo by OZAN KOSE/AFP via Getty Images)
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Turkey’s crisis-hit economy ducked a major contraction in 2020 thanks to a lavish loan stimulus that spurred a relative recovery in the second half of the year. The reversal, however, did not come without a price. Official figures show an alarming increase in the public debt burden despite the celebratory air in Ankara.

The COVID-19 pandemic undermined the economies and public finances of countries around the world last year, but Turkey’s economy was already fragile and its public deficits were already on the rise when the coronavirus arrived.

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