(MENAFN) According to the Treasury and Finance Ministry, Türkiye's gross external debt stock reached USD459.03 billion at the end of 2022, indicating an increase from USD439.26 billion at the end of 2021. However, the debt-to-GDP ratio decreased from 54.4 percent to 50.7 percent. The country's gross external debt represents the total amount of money that it owes to foreign creditors.
The net foreign debt of Türkiye was reported to be USD235.28 billion as of December 31, 2022, accounting for 26 percent of its GDP. This indicates a rise from the net debt of USD222.48 billion at the end of the previous year, while the debt-to-GDP ratio was 27.6 percent. Net foreign debt is the difference between a country's gross external debt and its foreign assets.
The increase in Türkiye's external debt may have been driven by factors such as borrowing for infrastructure projects or to finance its current account deficit. However, the decrease in the debt-to-GDP ratio is positive news for the country's economy as it indicates that the country's economic output is growing at a faster rate than its debt.
The government's efforts to reduce the current account deficit, which is the difference between the country's imports and exports, may have contributed to the decrease in the debt-to-GDP ratio. Türkiye's current account deficit narrowed to USD25.3 billion in 2021 from USD35.1 billion in 2020. The country's efforts to attract foreign investment and increase exports may also have contributed to the decrease in the debt-to-GDP ratio.
In summary, while Türkiye's gross external debt increased in 2022, the decrease in the debt-to-GDP ratio is a positive development for the country's economy. The government's efforts to reduce the current account deficit and attract foreign investment may have contributed to this decrease.
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