Turkish economy's financial assets over $3T in Q1

By Muhammed Ali Gurtas

ANKARA

The Turkish economy's total financial assets amounted to 11.85 trillion Turkish liras (around $3.1 trillion) as of the first quarter of this year, the Central Bank of Republic of Turkey (CBRT) announced on Tuesday.

According to the bank's Financial Accounts Report, the economy's liabilities totaled 13.57 trillion Turkish liras (some $3.55 trillion) in the January-March period.

As a result, the Turkish economy -- including financial corporations, households, general government, and non-financial corporations -- created a net liability of 1.72 trillion Turkish liras (around $450 billion) to the rest of the world in the first three months of this year.

The U.S. dollar/Turkish lira exchange rate was 3.82 on average during the January-March period this year.

"Thus, the rest of the world and the household sectors emerged as the largest contributors to the financing of the domestic economy," the bank said.

"An analysis of the domestic economy's financial balance sheets by sectors from 2010 to 2018Q1 suggests that households and the rest of the world generated a financial surplus and assumed a creditor role, whereas non-financial corporations and the general government ran a financial deficit and assumed a debtor role," it said.

The bank stated that financial corporations continued their balanced position with a financial net worth close to zero, due to their financial intermediation activities.

"The non-financial corporations sector proved the most indebted sector, which was followed by the general government," it added.

The bank said a cross-country analysis of indebtedness ratios by financial instruments shows that Turkey posted low levels of loan/GDP and debt securities/GDP ratios in the first quarter of 2018.

"The largest sector with respect to loan indebtedness ratio was non-financial corporations with a ratio of 67 percent of GDP," it said. "The general government was the leading sector in debt securities with a ratio of 27 percent."

According to the official report, Greece, Belgium, and the euro area -- 19 of 28 EU member countries using the euro as common currency -- had the highest loan/GDP ratios, while the U.S., Italy and the euro area had the highest debt securities/GDP ratios among selected countries over the same period.

The bank noted that the net borrowing/GDP ratio of the Turkish economy was 0.5 percent in the first quarter of this year, down from 7.8 percent in the same period last year.