Inflation pushes Turks into debt as lira plunges
Rapid inflation and a plummeting currency push Turks deeper into debt as they struggle to afford necessities.
According to the Turkish Banking Regulation and Supervision Agency (BRSA), total consumer debt from loans and credit cards reached 2.2 trillion liras at the end of July, up 83% from a year earlier.
With the lira losing value daily, many Turks rely on credit cards and consumer loans. Although interest rates remain high, personal loans have increased by 60% as people try to maintain their standard of living.
Mortgage debt rose 26%, while car loans jumped 238% as inflation makes big-ticket purchases more expensive. But credit card debt saw the most significant jump, nearly tripling to 807 billion liras.
Citizens turn to cards because of their lower interest rates than other borrowing options. But with so many falling behind on payments, non-performing debt has also risen 28% to 36 billion liras.
Financial experts warn that this debt spiral will continue as long as the lira remains weak and inflation runs hot. They advise the government to take urgent steps to stabilize the currency and control consumer prices before debt overwhelms Turkish households.