On 24 April 2018, The Financial Times published an article titled “Turkey’s corporate debt burden sparks jitters on economy.” However, the article gives an inaccurate estimate about the percentage of the corporate debt to the gross domestic product (GDP) in Turkey.

Giving place to the remarks of a Turkish economist named Ugras Ulku who is based in the Institute of International Finance in Washington, the article claims that the corporate debt equates the seventy per cent of the GDP in Turkey.

Corporate debt is now roughly 70 per cent of gross domestic product according to our estimate

But is this estimation correct?

Corporate debt refers to the money that is owed by companies rather than by governments or individual people. According to the data of Turkey’s Central Bank, the total amount of Turkey’s corporate debt is $246 billion as of 2018. On the other hand, Turkey’s gross domestic product (GDP) is $863.39 billion as of 2018. Therefore, the ratio of the corporate debt to GDP makes 28 per cent in Turkey, far below than the 70 per cent estimated in the article.

Even the external debt of Turkey, which includes both corporate debt and the government debt, is $429.6 billion and that still makes below the 70 per cent of the GDP.

Turkey’s corporate debt is in relatively low levels. For instance, the corporate debt of the US is $8,3 trillion, making 45 per cent of the US’s GDP while China’s corporate debt hit 159 per cent of its GDP.

Turkey also has the seventh smallest percentage of government debt to GDP ratio with 38 per cent within G20 countries while Japan’s government debt amounts to 240 per cent of its GDP and the government debts of Italy, France, Canada, the US, the UK and Germany are between 83 and 126 percent of the GDP of those countries.