Turkey’s Debt Crisis Explodes: Millions of Lawsuits Over Unpaid Bank Loans
Turkey is grappling with a widespread crisis of bank debt fueled by soaring inflation, the falling value of the lira, and high-interest rates. This crisis has resulted in millions of lawsuits against citizens unable to repay their bank loans, pushing the country’s economy into a fragile state.
The Turkish economy has entered a dangerous phase due to sharply rising prices and the persistent decline in the lira’s value. According to Al-Arabi Al-Jadeed, annual inflation surpassed 33% in September, while the central bank interest rate has climbed to 40.5% after successive increases. Consequently, many Turkish households have been forced to take out bank loans simply to cover basic living expenses.
The surge in debt has led to an unparalleled increase in legal cases. Al-Arabi Al-Jadeed reports that over 7.651 million legal enforcement cases related to debt repayment have been filed in Turkish courts so far, and the total number of active cases in judicial offices has exceeded 35 million. Turkish news sources describe this as a sign of a deep financial crisis and mounting pressure on the middle and lower classes.
Data from the Turkish Confederation of Labour Unions (Türk-İş) highlights the severity of the crisis: the poverty line has reached approximately 85,000 Lira, and the hunger line (cost of basic nutrition) is over 26,000 Lira, while the minimum wage remains at only 22,000 Lira. This vast gap between income and expenditure means the number of families relying on borrowing to survive is rising rapidly.
Economic expert Özcan Uysal warned Turkish media that the disparity has pushed a large segment of citizens to the brink of financial insolvency. Uysal cautioned that with increasing corporate bankruptcies across the construction, food, steel, and textile sectors, the probability of a widespread economic recession in the coming months is very high. He called for immediate government intervention to ease debt burdens and support vulnerable segments of society.
