The governments in Turkey usually resort to domestic and international borrowing in cases where tax revenues are not sufficient for financing public expenses. Therefore, the share of the Public Sector Borrowing Require- ment (PSBR) in the GNP has shown a rapidly increasing trend in recent years.
This ratio which rose rapidly due to accelerating applications of liberalization in the economy reached to 12 percent in 1993. The ratio of the PSBR to GNP which showed a declining trend due to the effect of stability measures applied in 1994, increased again in 1996 and was realized at 8.7 percent in 1998. Debt management in Turkey has been connected to new rules and principles by the Budget Law of the 1986 Fiscal Year. The foreign debts item consists of term loans and foreign loans.
Term loans show payments of the principal made from foreign currency loans which have been provided from abroad and transferred to various public organizations by the Treasury. As for the foreign loans, they are the resources provided from abroad as a Program Credit. Domestic borrowing is accomplished via bonds or debenture bonds issued by the Treasury.