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A Note on the Debt Sustainability Issue In Turkey

Author

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  • Nur Keyder

    (Department of Economics, METU)

Abstract

The purpose of the paper is to shed light on the composition of the public sector debt stock and using the end-2002 net public debt stock-to-GNP ratio as the starting point, estimate the primary surplus-to-GNP ratio that will be necessary for the sustainability of the debt stock, using a modified version of the approach suggested by the World Bank (2000:16-18; 121-124). The relevant tables on the primary surplus-to-GNP ratio requirements are constructed under different scenarios with respect to real interest rate, growth rate and inflation rate. At the second stage, the weighted average real interest rate on the current central government debt stock is estimated. Then the debt sustainability issue is evaluated by comparing the estimated primary surplus-to-GNP ratios required with the targeted primary surplus ratio, taking into consideration the real interest rate on the existing stock.

Suggested Citation

  • Nur Keyder, 2003. "A Note on the Debt Sustainability Issue In Turkey," ERC Working Papers 0302, ERC - Economic Research Center, Middle East Technical University, revised Mar 2003.
    • Handle: RePEc:met:wpaper:0302
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    File URL: http://erc.metu.edu.tr/en/system/files/menu/series03/0302.pdf
    File Function: First version, 2003
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    Citations

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    Cited by:

    1. Ata Özkaya, 2014. "Hidden Overhang of Domestic Debt and Its Role in the This-Time-Is-Different Syndrome: An Empirical Contingent Liabilities Model," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(4), pages 73-94.
    2. Voyvoda, Ebru & Yeldan, Erinc, 2005. "Managing Turkish debt: An OLG investigation of the IMF's fiscal programming model for Turkey," Journal of Policy Modeling, Elsevier, vol. 27(6), pages 743-765, September.
    3. Josef Pöschl & Hermine Vidovic & Julia Wörz & Vasily Astrov, 2005. "Turkey:Macroeconomic Vulnerability,Competitiveness and the Labour Market," Working Papers 2005/5, Turkish Economic Association.

    More about this item

    Keywords

    Turkey; debt; sustainability;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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