Economist says Turkey will face slowdown in economic growth in 2018

The weekly Economist magazine has published an analysis of the sustainability of the growth in the Turkish economy in its new issue. In the article, it was shared that a slowdown in 2018 would inevitably take place. In its new issue the Economist said published an article asking the question “Turkish economy which works to the full capacity is one of the world’s fastest growing economies. But how long will this last?”

The Economist stated that the credit guarantee fund played a big role in the growth figures and shared following;

“The Turkish Economy enjoyed a growth of 11 percent in GDP in third quarter of the year thus outperforming all major countries in this regard. This has to do with very poor performance Turkey had shown in same period 2016, partly as the economy had shrunk by 0.8 percent after the failed coup attempt at the time. The economy, owes this performance to the wave of easy credit facilities across the country which has helped companies to cope with sharp decline in tourism, the burden of the OHAL and the impact of government pressure causing the freedom of 60,000 people. “

The Economist also said that the overall outlook of the Turkish economy was not entirely promising, and added “Turkey’s account deficit of 33.7 billion dollars at the end of 2016 has gone up to 41.9 billion dollars currently. Foreign investment has decreased by half as compared to ten years ago, roughly. The inflation nightmare that prevailed from 1970s to beginning of 2000s could come back with the effect of the credit increase.”

The economist also drew attention to the depreciation of the Turkish Lira and shared following; “Fears of political turmoil, terrorist attacks, conflicts with partners, and finally prospects that the USA could fine Turkish banks suspected of having violated America’s embargo on Iran, have also damaged the country’s reputation. Anyway the slowdown seems to be inevitable this year. Experts say, the Turkish banks have no funding base for another major credit injection through the Credit Guarantee Fund. The economy was working at full capacity in 2017. Now, the fuel is starting to run out.”