By Xander Snyder
Turkey’s economy isn’t as strong as it appears. The Turkish national statistics service recently released data showing how gross domestic product grew by a more-than-respectable 7.4 percent in the first quarter of the year. Yet that figure is deceiving: By itself, it ignores the fact that growth was fueled by debt, much of which came from foreign lenders. Growth funded on someone else’s dime isn’t a strength, it’s a vulnerability.
The government in Ankara has been on a bit of a spending spree. The government deficit has continued to grow in recent years, thanks in part to high defense expenditures and economic stimulus, and it will continue. The government has also spent a lot of money on infrastructure and has allocated funds toward providing credit guarantees to private sector lenders, effectively multiplying the amount of money spent by the government by encouraging credit growth. But when a government doesn’t have enough revenue to cover spend