New signs of economic collapse: Lack of confidence in Erdogan

The economic collapse in Turkey coincides with the fall of Erdogan, and the evidence is the decline in Erdogan’s popularity, lack of confidence in his government and the economic measures that he recently took, which is clear, as the demand for gold continues, instead of the lira, pressing for the increase in the current account deficit, which has expanded more than expectations.
According to official information, the Turkey’s current
account deficit widened to $4.06 billion in November, as demand for imports
such as gold continued even after the central bank raised interest rates.
The central bank said on its website that the current
account gap grew by $15 million in November compared to a year ago, raising the
persistent 12-month deficit to $38 billion.
The country was expected to post a deficit of $3.7 billion
in November, according to the median estimate in a Reuters poll of 11
economists last week. Forecasts ranged from $1.1 billion to $4.1 billion. It is
the largest deficit since August, at $4.71 billion.
Turkey's current account gap has widened sharply, driven by
a government-backed borrowing boom, putting pressure on the beleaguered lira,
which slumped to successive record levels last year. Lira losses and rising
inflation prompted the central bank to intervene and raise the benchmark
interest rate to 17% from 8.25% in September.
The current account deficit in Turkey is largely due to the
lack of exports versus imports, while the country's foreign trade deficit
doubled in November year on year to more than $5 billion, according to data
from the Turkish Statistical Institute (TurkStat).
The central bank said that the current account for the month
of November recorded a surplus of $632 million, excluding gold and energy. This
compares to a surplus of $4.09 billion in the same month in 2019.
Foreign investors bought $1.28 billion in stocks and $607
million in domestic bonds a month, helping to finance the deficit. The central
bank said that Turkey's official foreign exchange reserves recorded a net
outflow of $145 million.
The Reuters poll showed that the current account gap by the
end of the year could reach $37.7 billion. That is, the average forecast rose
from $35 billion in November.
The Turkish lira fell more than 2% against the dollar on
Monday, with continued gains in the US currency amid hopes of further stimulus
to the US economy.
The lira was at 7.47 per dollar by 0602 GMT, compared to
Friday's closing level of 7.3550. Earlier, it had fallen about 2.2% to 7.52
pounds per dollar.
Meanwhile, unemployment in Turkey rose by 9.12% in October. Official
data released on Monday showed that seasonally adjusted unemployment in Turkey
rose by 1.0% to 9.12% in October for the first time after three months of
decline.
According to Bloomberg News, female unemployment has reached
5.15%.
Among males, it reached 5.11%, rising for the first time
after declining over the past three months.
Youth unemployment reached 8.24%, rising for the first time
after four months of decline.
Economic researcher Guldem Atabay Sanli confirms that the
next year is worse in terms of economic indicators for Turkey, saying, “In the
nineteenth year of the AKP’s government’s power, you find that locals do not
believe the economic reform story and do not return to the lira again compared
to the demand for the dollar. Although recent investments in Turkey after the
interest rate hike seem encouraging, the policies pursued in Turkey need a
complete realignment of significant growth in GDP.”
Aykan Erdemir, a former member of the Turkish parliament and
first director of the Turkey program at the Foundation for Defense of
Democracies, and researcher John Lechner confirmed in a joint article that they
anticipated the signs of a stormy economic crisis threatening the Turkish
economy in crisis, and they looked at the latest gold rush in Turkey and what
it reveals about the country's economic reality, describing the Turkish economy
as "a train wreck in slow motion." In turbulent times, the Turks seek
to convert their savings into gold to protect against the fluctuations sweeping
the currency, and this matter is more expressive in Turkey compared to other
places, where a history of financial crises that hit the Turkish economy has
undermined Turks' confidence in political and economic institutions.