Critical Warnings for Global and Local Economy from Prof. Dr. Sinan Alçın

Prof. Dr. Sinan Alçın drew attention to the difficulties in rolling over the debt stock in the global economy and the risks that France's budget deficit could create across Europe, while also warning of short-term external debt and exchange rate pressure for the Turkish economy.

Prof. Dr. Alçın stated that budget deficits in France could create a picture similar to the 2012 Greece crisis and that this situation could affect the entire European Union. He expressed that the energy crisis triggered by the Russia-Ukraine war and the contraction in the welfare state structure have created a deep fracture of expectations in Europe.

Emphasizing that crude oil prices hovering above 100 dollars in global markets bring along a risk of stagflation similar to the 1974 oil crisis, Alçın predicted that if oil closes the year at these levels, 125 dollars could become the new normal next year.

Evaluating data regarding the Turkish economy, Alçın stated that the gross debt stock has reached 16.2 trillion liras, 50.7% of which is in foreign currency. He noted that the short-term external debt, reaching 243 billion dollars, has exceeded the 220 billion dollar level of 2018, creating serious stress on the economy.

Stating that a 29.5% increase in producer prices in the manufacturing sector and a 44.5% increase in energy have led to a permanent stagnation, Alçın emphasized that Turkey's most fundamental risk is a balance of payments crisis. Assessment: Alçın argues that the economic management must take steps compatible with market realities in order to keep international credit windows open.