Capital Shortage And Demand Destruction To Cause Deep Contraction

Turkey is facing its largest economic contraction in at least two decades, with our real GDP growth forecast revised to -5.7%. Marked draw downs in foreign investment will exacerbate an ongoing capital shortage, which in turn will drive the demand destruction and sharp decline in gross fixed capital formation, which will push the economy deep into recession. While an improvement in the net export component and rise in government consumption should partly offset the downtrend, the potential growth from this will be limited, especially as Ankara will be fiscally constrained by an IMF Standby Arrangement.

To read the full article, please choose one of the following options: