Ankara’s interest liabilities balloon to dizzying heights
The ratio of the Turkish government’s interest liabilities to its principal domestic debt has hit a staggering 117%, up from 60% last year.
The Turkish government’s borrowing costs have drastically increased amid spiraling inflation, with the treasury’s interest liabilities reaching 1.75 trillion Turkish liras ($120 billion) in April to outstrip its principal debt stock of 1.48 trillion liras.
As Al-Monitor reported earlier this month, the inflation surge in Turkey has led to daunting income transfers to the detriment of the wage-earning masses, with banks emerging as a chief beneficiary of Ankara’s controversial economic policies. Banks made net period profits of 39 billion liras in the first two months of the year, a 323% increase from 9.2 billion liras in the same period in 2021. Those whopping profits owe mainly to a government bond pegged to the consumer price index (CPI), one of the treasury’s three lira-denominated bond types, along with other domestic borrowing instruments based on hard currency and gold.
