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Turkey Current Account Gap May Pressure Lira: Top Businessman

TURKEY
  • Slowdown in European economies due to Ukraine crisis would hurt Turkey’s exports
  • Price increases, decline in tourism revenues and rising energy import bill would create additional burden on current account deficit, pressuring the lira
  • Monetary and fiscal policies should be implemented in line with price stability objective
  • Too low interest rates punitive for savings
    • In an environment of excessively negative real rates, mechanism to convert savings to investments doesn’t work; thus money flows to FX, gold, property, imported electronic goods and imported cars
  • Turkish farmers unable to compete with cheap imports, leaving rural areas and flocking to cities
  • Western economies are set to diversify supply chains, which will create opportunities for Turkey
  • Westernization, development and democratizations go hand in hand in Turkey
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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