Turkey is the latest in a long procession of countries to accept the international invitation to accelerate its economic develoment using leverage. The debt ratio for the private non-financial sector in Turkey has risen from 49 per cent of GDP in Q4 2009 to 84 per cent of GDP in Q4 2017. In March 2017 the government reinforced the lending boom through infrastructure spending and by increasing the size of its Credit Guarantee Fund, which guarantees loans to small and medium-sized businesses. The leverage party is over. With the IMF waiting in the wings, will Turkey emulate 2012 Greece or 1998 Thailand in its rehabilitation?
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