FISCAL BALANCE AND PUBLIC DEBT IN TURKEY IN THE CONTEXT OF GLOBAL CRISES: PUBLIC FINANCE INDICATORS

This study provides a comparative analysis of Turkey’s economic vulnerabilities during the 2008 global financial crisis and the 2020 Covid-19 pandemic, as well as the fiscal implications of these turbulent periods. All indicators used in the analysis were obtained from the IMF’s World Economic Outlook (WEO) database. The graphical evidence clearly demonstrates that the Turkish economy was exposed to rapid and severe shocks in both crises.

The 2008 crisis primarily spread through financial markets. The banking system came under pressure, credit channels tightened, and domestic demand contracted sharply. In contrast, the 2020 pandemic brought economic activity to an abrupt halt. The near-complete cessation of operations in the services sector exerted strong downward pressure on growth. Disruptions in production chains and heightened uncertainty generated a profound economic contraction.

In both periods, the government implemented expansionary fiscal policies to mitigate economic losses. Tax deferrals, social assistance programs, and credit facilitation measures were among the most prominent policy tools. While these interventions supported the economy in the short term, they also led to increases in the budget deficit and public debt ratios.

Overall, the findings indicate that Turkey was able to utilize its fiscal space effectively during periods of crisis. However, a return to fiscal discipline after the crises remains crucial for ensuring debt sustainability. The general conclusion of the study is that a robust fiscal framework not only enhances resilience against economic shocks but also accelerates post-crisis recovery.