Turkish economic policy will be inconsistent to 2019

Subject

Economic policy to 2019.

Significance

In a climate of global monetary tightening, domestic and international political tensions, and brittle ties with the EU, investor-friendly economic policies would help secure continued capital inflows and investment in Turkey, thus keeping the lira stable and maintaining a tenuous economic recovery. However, economic policy has recently been geared towards achieving a short-term boost rather than longer-term stability and competitiveness.

Impacts

• The AKP may not regain the confidence of international financial markets, which once saw it as a 'safe pair of hands' for the economy.
• Sharp variations in exchange rates, interest rates, prices and demand are likely given global conditions and unpredictable policy-making.
• Economic policy uncertainty will add to the complexity of the environment for doing business.