Abstract:

The investments needed for the development of developing countries are at a limited level because the savings are not sufficient. While savings are the source of planned investments, investments increase the demand for external consumer goods by increasing the imports of raw materials and investment goods and by increasing the level of income. In order to resolve increasing demand for imports, it is necessary to provide foreign exchange entrance to the country by raising exports or going to foreign debt. External debt enables both the removal of savings deficiency and the necessary imports for development. External debt and inflation are one of the major problems in the country’s economy. The excess of the unregistered economy, the occurring contextual volatility, the continuous opening of the budget, the debt becoming debt-solvable, the waste in private and public spending and natural disasters have led to the increase in external debt and the country’s economy has been negatively affected. In this study we have studied the relationship between debt and inflation according to data. Keywords: foreign debt, inflation,

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