Turkey's ticking debt time-bomb
by Spengler
Turkey's economy came to a dead stop during the first quarter, but the country's credit bubble continues to grow.
Under the headline "Ankara's Economic Miracle Collapses'', I argued a year ago in the Middle East Quarterly that Turkey's economic prowess had more hype than substance. The government of Prime Minister Recep Tayyip Erdogan had financed a consumer bubble with a huge trade deficit financed by short-term interbank loans. The consumer boom is gone, but the credit bubble continues, with bank lending still expanding by 30% a year despite the stalled economy.
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