Turkey facing economic turmoil under Erdogan
The Turkish government, led by
President Recep Tayyip Erdogan, is facing a new crisis as economic risks are
mounting, especially after the World Bank cut the country’s growth forecasts.
The World Bank has forecast the
Turkish economy to slow down with a decline in the lira. It said the Turkish
economy would grow at – 2.6 percent.
Turkey’s economy has been hit by a
financial crisis with a decline in the lira. Last year, the lira lost 30 percent
of its value, and it is down 15 percent so far this year.
The lira has been hit hard after the
US doubled tariffs on Turkish steel and aluminum. The Turkish authorities
detained a US minister on allegations he had taken part in a failed coup in
2016.
However, the Turkish authorities
released him.
The Turkish economy collapsed in
2001 as the lira fell to 1.5 million versus the US dollar. Since 2003, Erdogan
has worked on boosting the economy via relying on bank loans and financial
facilities.
However, mammoth debts hit the
Turkish economy in 2017. Growing government spending has exacerbated the
economic turmoil.
Bloomberg experts said: “Turkey was
one of the fastest-growing emerging economies in 2017, but its growth wasn’t
balanced. Excess government spending and rapid credit growth caused imports to
surge and the current account deficit to widen. Unsurprisingly, the economy is
paying the price for past excesses.”
The Turkish economy has been
shrinking. It fell to 2.6 percent in Q1 2019. The economic recession has
continued, especially as the lira has been weakening since August.
