The wealth of the rich has doubled

The wealth of the rich has doubled


The Central Bank’s Financial Stability Report showed that if the effects of the pandemic continue, the existence of mercenaries has doubled in TL over the past year, which can be defined by the increase in rates of currency and inflation due to Central Bank policies, global inflation and the Ukraine-Russia war.

According to the report, in March 2022, household assets in Turkey doubled over the last year and increased from 2 trillion 310 billion liras to 4 trillion 310 billion liras. Although the Central Bank charges this figure to all citizens, we know that financial assets are mostly owned by only a small part of society. On the other hand, household liabilities, i.e. debts, increased by 200 billion lira, from 937 billion lira to 1,000 billion lira 137 billion. 71% of borrowers belonged to the middle and low income group, made up of employees.


The report revealed that inflation and rising exchange rates did not affect all sections of society at the same rate, while some, namely the rich, made them wealthier, while the middle and lower sections, especially workers, could only survive by borrowing more. Thus, it was revealed once again that the wealthy and the middle and lower classes were not on board. Because while the rich multiplied their wealth, the boat of the most modest took on water. According to the report, in March 2022, the wealth of the rich increased from 2 trillion 690 billion to 4 trillion 310 billion liras in the last year. 705 billion of this amount came from DTH deposits due to the increase in the exchange rate, 350 billion from TL deposits, 183 billion from gold deposits, 106 billion from the increase in share price and more than 200 billion of funds.


On the other hand, the debt of the citizen who has no money has increased by 200 billion lire and exceeded 1.1 trillion lire. L120 billion of the increase in debt was due to the increase in credit cards and L75 billion to the increase in general purpose loans. About 80% of people who have consumer loan debt have a low amount of debt (less than 50,000 TL). The loan debt of these individuals constitutes about 40% of total consumer loans. In the second quarter of 2020, in order to mitigate the negative effects of the pandemic on households, it was observed that loans granted with small amounts under the “Basic Needs Support Package” were effective in the increased loan balance from 0 to 50,000 TL and number of customers. In fact, it was understood that the average debt balance per person in the group below 50,000 TL was around 15,000 TL. In the third quarter of 2020, a significant part of the increase in debt was reflected in the charts, which came from the segment with credit debt above 50,000 TL (average direct citizen). The total debt balance of this segment increased significantly and reached TL 259 billion in March 2022, and the share of debt balance in total consumer loan balance increased to 59%. It is estimated that this increase is due to insufficient income on the one hand, to the increase in the prices of consumer products and to the demand which has arisen with the anticipation of inflation.


Despite inflation, the decrease in the rate of credit card limit usage from 49% to 48% showed that the bells were ringing in terms of spending. Under normal conditions, this price increase should gradually increase the use of the limit. There has been no significant change in the number of people in debt from home loans. On the other hand, although the share of employees in the use of credit fell slightly in the third quarter of 2021, it still remained above 70%. The increase in the share of the low-wage segment with income volatility in recent years also limits household credit risk.


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