31 Mar 2019, Guy Dunn
All of this came just ahead of crucial municipal elections in the country that threaten to undermine President Erdogan. An economy in recession and a collapsing currency do not reflect well on his government who have so far maintained a firm grip on the Turkish electorate through populist policies designed to produce unsustainable levels of economic growth.
The confidence of foreign investors will have been badly shaken by the reaction of the Turkish government last week to a potential run on the currency and may take some time to return. This, combined with monetary and fiscal tightening measure that are likely to result in further economic contraction, presage an inevitable an extended period of turbulence for the Turkish economy. The question is what impact a deepening Turkish crisis will have on an already jittery global economy.
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