1994 krizi
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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
Outline of the Presentation
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A liberalization program launched (1980)
1980 – 1994 Period of Turkish Economy
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The capital account liberalization (1989)
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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
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i. Generous agricultural support policies
ii. Worsening performance of the state owned economic enterprises
iii. The increased cost of military operations
iv. Interest payments
Reasons of High PSBR
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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 Borrowing 3.4 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 Borrowing 2.7 2.1 0.8 0.9 0.4 1.6 1.4 -1.8 -0.9
PBRS Ratio Between 1987 and 1995
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•A STABILIZATION PROGRAM LAUNCHED (IMF)
PRICE INCREASES OF 70 TO 100 PERCENT ON SEE GOODS
LOW PUBLIC SECTOR WAGES
CUTTING DOWN ON PUBLIC INVESTMENT
April 5th, 1994
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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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Gizem Büyüksungur *