1994 krizi

1980 – 1994 Period of Turkish Economy

Pre-crisis Period

Reasons of High PSBR

Table 1: PBRS Ratio Between 1987 and 1995

Stabilization Program, April 5th, 1994

Post-crisis Period

A liberalization program launched

(1980)

Pre-crisis

Period

I. Large and growing fiscal and external imbalances

II. Rising and very high PSBR

III. Political and social problems

IV. Real exchange rate appreciation

i. Generous agricultural support policies

ii. Worsening performance of the state owned

economic enterprises

iii. The increased cost of military operations

iv. Interest payments

Ratios to GPD, %

1987 1988 1989 1990 1991 1992 1993 1994 1995

PSBR 6.1 4.8 5.3 7.4 10.2 10.6 12.0 7.8 5.4

Financing PSBR;

Net Domestic

Borrowing3.4 2.7 4.5 6.5 9.8 9.0 10.6 9.6 6.3

Bond 1.2 0.3 0.4 0.5 2.0 2.2 1.1 6.3 2.5

Treasury Bill 1.2 1.9 2.6 2.0 0.4 1.4 1.5 -1.8 1.1

Cash Advances from

CB

0.5 0.5 0.2 0.1 1.7 1.6 2.7 1.3 1.2

Others 0.5 0.0 1.3 3.9 5.7 3.8 5.3 3.8 1.5

Net Foreign

Borrowing2.7 2.1 0.8 0.9 0.4 1.6 1.4 -1.8 -0.9

PBRS Ratio Between 1987 and 1995

Aftermath of the Crisis

The Turkish economy contracted by 6%

In the first quarter of 1994, the Turkish Lira (TL)

was devalued more than 50% against the US$

The Central Bank lost half of its reserves

Interest rates skyrocketed

Inflation rate reached three digit levels

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