Opinion | The original sin behind the lira crisis
Turkey has emerged as a classic case of the complex interplay of macroeconomic forces leading to macro-imbalances and crises
The free fall of the Turkish lira and its impact on the markets has drawn attention to the puzzling nature of the mechanics of global macroeconomic crises. What explains the fastest growing G20 economy in 2017, with an external debt to gross national income ratio of only 47.8% and ranked only a distant eighth in the top 20 Developing Debtor Countries (World Bank, International Debt Statistics, 2018), slipping and becoming the latest villain in the global growth story? This is even more surprising when compared to countries that fare worse on their external debt metrics, including Kazakhstan (135.1%), Ukraine (127.8%), Bulgaria (76.4%) and Malaysia (69.6%).