Published On: Wed, Jun 6th, 2018

Why has Turkey been facing major difficulties in economy ahead of elections?

Why has Turkey been facing major difficulties in economy ahead of elections?

Turkish Economy Industry – BusinessTurkeyToday.com

 

Turkey is going to hold the most important deputy elections in its history on 24 June 2018. On the same day presidential election will be held and the country will switch to a new type of administration as imposed by the ruling government a while ago. The opposition has been displaying a powerful resistance on all political occasions available and the competition between presidential candidates challenging the current president is getting tougher each and every day.

Ahead of these vital elections the country has been fighting some tough economic challenges such as weakening Turkish Lira, climbing inflation, current account deficit etc.

When looked into the issue through the eyes of an expert we see that Turkey’s agenda has been occupied with major economic issues due to following reasons:

Growing debts of the country, significant slowdown in capital inflow, climbing current account deficit, high inflation, political discourse of administration, continuation of OHAL (State of Emergency), lack of trust in law, elections with unforeseen political outcome, bad relationships with neighbors, USA-Iran tension and oil prices

Together with these major reasons, factors such as amnesty (taxes) package introduced by the government ahead of elections, and the fact that Central Bank has remained in the shadow of politics (it was warned/criticized by the President several time regarding interest rates etc.) has fueled concerns and risks regarding the economy and given the message “we have entered a dead end in terms of economy and we are taking measures with results we cannot foresee” rather than giving confidence to the markets (both domestic and foreign – in particular) and increased uncertainty regarding Turkey’s economy.

Therefore the new administration to be elected on 24 June 2018 will be facing a truly tough challenge to cure economy and the consequences will no doubt be reflected on ordinary citizens as well as businesses. To recap, Turkey has managed to overcome a major crisis in 2001 and there is no doubt this very powerful country will be able to cope with the current one as well, provided the new administration to come puts into practice the right solutions.





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