Turkey, especially in 2016 is playing a re-wrapped pallets to deal with the same film since late: credit growth of domestic demand magnifying low-cost predictability due does not lead to sufficiently increase in production this demand, rising domestic demand for imports and hence the current account deficit to detonate the economy as a result thoroughly kırılganlaşıy.
Bank lending is growing rapidly recently, a tremendous political power in Turkey is ‘plenty of credit’ by trying to grow. management of credit growth in the economy through the economic wheels in motion again and overcoming the crisis in which Turkey sees as the most important lever. State banks have taken the lead in the credit increase; Although private banks were not very enthusiastic about this issue, they had to join this trend – due to the overt or implicit pressures of the economic management. Furya the advent of the word, the issue has now turned into a “credit frenzy” in the truest sense of the word. According to the data published regularly on the Central Bank’s website, the total amount of loans granted by banks reached approximately 3 trillion 200 billion TL as of the beginning of July. The increase in the last 1 year was approximately 745 billion TL, of which again, approximately 420 billion TL was used by the state banks. Compared to last year’s figure, loans have increased by around 30 percent in nominal terms. When considering that national income in Turkey is currently around about £ 4.4 trillion, it is understood that exceeds 70 percent of the national income of the total credit volume. It is seen that there has been an extraordinary increase in total loans since the beginning of the year and especially since the beginning of the pandemic. As of New Year’s Eve, the total loan volume was approximately 2 trillion 640 billion TL. Since the beginning of the year alone, there has been an increase of approximately 560 billion TL in the total loan volume. Again, Central Bank data show that the total amount of loans has increased by TL 400 billion since the beginning of March. If the increase is calculated by annualization, it is seen that the increase in credit reaches 50 percent annually. Approximately two-thirds of this recent credit increase has been provided by state banks.
Economic management Turkey is ‘plenty of credit’ debit from working with and magnification. Does this method really work? We see that economy management has attached special importance to this method, especially since the end of 2016. Past experiences, loan growth in the market ‘flash in the pan “like that bring temporary relief occurs, however, indicate that further complicate the economic problems of Turkey. Economics literature also points out that when viewed from a long-term perspective, sudden and rapid credit increases do not bring any good, on the contrary, they create permanent damages in the economy.
Do the financial sector develop as economies grow, or do economies grow as the financial sector develops? What is the causal link between the development of the financial sector and the growth of economies? This issue has been discussed in the economic literature for a long time. It is known by everybody that the development of the financial sector has an enlarging effect on economies; however, the effects of “rapid / excessive credit growth” that will undermine financial stability and create a crisis and / or deepen the existing crisis have been more widely expressed in the economic literature in recent years.