"... Despite the largesse of the Gulf States, Turkey is locked into a vicious cycle of currency depreciation, higher interest rates, and declining economic activity. Turkish voters stood by Erdogan in last March's national elections, believing that he was the politician most likely to deliver jobs and growth. But his ability to do so is slipping. If the Turkish lira drops sharply, the cost of debt service to Turkish companies will become prohibitive, while the cost of imports and ensuing inflation will depress Turkish incomes. By some measures Turkey already is in a recession, and it is at risk of economic free-fall.
That explains Erdogan's propensity to shoot the messengers: the rating agencies, the central bank, and even the New York Times. For the past dozen years he has made himself useful enough to his neighbors to stay in business. His magic carpet is unraveling, though, and his triumph in the March elections may turn out to be illusory much sooner than most analysts expect."
Tuesday, September 23, 2014
Posted by G, M, Z, or B at 6:01 PM