Turkey: Towards an inevitable economic crisis?
Between tensions with the United States since 2018, the major decline in tourism activity due to the Covid-19 pandemic and the various inflationary stimulus plans set up by President Erdogan, Turkey is facing a very harsh economic period. Inflation reached70% year-on-year in Apriland the country is sinking into the economic crisis.
In contrast to many emerging countries that, to stem price increases, have raised their interest rates, Ankara has opted for the opposite choice in order to boost its growth. This policy has led to the11 % GDP in 2021, after avoiding the recession in 2020. At the same time, the Turkish currency lost half its value against the euro and the dollar.
Government Responseincrease the minimum wage by 50% at the beginning of the year(cf.Sourcing Turkey: 50% increase in minimum wage as of January 2022) was insufficient to support consumption.
Moreover, the conflict in Ukraine has raised the price of wheat and oil, which the country is one of the main importers, even though investors are reluctant to finance the economy. Onefall in GDP from 4 to 8%is anticipated for this year.
The government would consider requiring Turkish exporters to exchange 40 per cent of their foreign currency in pounds (compared to 25 per cent currently), with a view to maintaining a certain flow of capital.
To read more
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Fusce tortor lake, ornare dictum odio no, mollis tincidunt mi. Vivamus feugiat turpis ac consequattrices. Nam nec leo in nisi posuere vehicula. None porta tempus feugiat. Praesent shovel, urna sed placerat sodales, ex tellus ultricies velit, vitae auctor augue diam at quam. Praesent ornare arcu and sem curriculum molestie. Morbi congue arcu velit, a laoreet torture ultricies id. Duis vulputate lacinia magna, eget elementum mi pulvinar eget. Sed consectetur malesuada ultricies. In eget purus nect velit sodales ullamcorper eget in ligula. Mauris ulcers posuere lobortis. Nulla nisi purus, beaconra no is ac, faucibus lacinia torturer. Integer nunc duei, vehicula finishedbus had, euismod and orci. No mollis vestibulum luctus.
Interdum and malesuada fames ac ante ipsum primis in faucibus. Sed a ligula sagittis, eleifend metus ac, sagittis purus. Vivamus ut blandit dolor, id aliquam mi. Sed tempor tempus ornare. Sed nec risus a metus eleifend sagittis. Aenean had torture lectus. Aliquam varius iaculis curriculum. Aliquam stubborn gravida augue and elementum. Aliquam trestique interdum pretium. Nunc ut selerisk massa, sed venenatis diam. No vehicula luctus odio. Integer ac turpis massa.