Turkish households lose their appetite for spending on loans | Mustafa Sönmez
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The Turkish economy rapidly borrowed externally as financial corporations sourced nearly one-third of their resources as credit for consumer families.This lending boosted the domestic sale of houses, vehicles and durable and indurable products, mainly white goods. To put it in another way, the borrowing by households became one of the building blocks of the growth paradigm based on the domestic market that went on to soar from year to year. From September 2004 to September 2014, the loan stock of total households increased nominally at a rate of 1,306 percent. However, a recalculation of this for inflation shows that there was an increase of 48 times in real terms. Those who borrowed one in 2004 are now borrowing five. The total credit used or the debt stock has increased almost five-fold.
However, in the past 12 months when the economy stagnated, there has also been a significant slowdown in consumer loans. The dimensions of the consumer loans that appear in the form of consumer credits as house, vehicle and general-purpose personal finances, and as cash credit through credit cards, exceeded 345.5 billion Turkish Liras (155 billion dollars) as of September 2014, but when inflation is taken into account, there was a 1 percent decline compared to the previous year. This means a decrease in demand for an economy that is growing based on the domestic market and also means a slowdown in its motor of growth