How to fix Turkey’s ‘sagging economy’
- by admin
Turkey’s economy has slipped back into recession this year as the government struggles to cope with the impact of an international bailout.
Key points:The government has promised to boost spending in an effort to restore the country to growth and to prevent it from falling into a repeat of the Great DepressionInflation has hit an all-time high in Turkey, and some experts are warning that the country may have entered another downturnThe economy is still growing at 7.3 per cent, well below the European average of 12.4 per cent but still a remarkable turnaround from a decade ago, when inflation was at 10 per cent.
Turkey’s economy contracted by 7.2 per cent in the year to March.
“There is no other country in the world that could see its GDP shrink this much.
There are no other countries where the economy is falling into recession at such a rate,” said Youssef Kebab, an economics professor at Istanbul University.”
If you look at other emerging economies, like Brazil and Russia, they have seen their GDPs shrink over the past decade.”
Mr Kebbab said that although Turkey’s economic growth rate has dropped since 2014, inflation remains above 40 per cent and is now well above the eurozone average of 15 per cent.(Reuters)Turkey’s central bank, the Bank of Turkey, has raised its benchmark interest rate twice in the past year.
The country’s government has repeatedly announced a plan to boost the economy in an attempt to revive the country from a slump.
Last year, the central bank raised its key interest rate to 6.5 per cent from 5 per cent for the first time since 2008.
Mr Kechbab added that if the country was to survive as a member of the EU, it needed to boost investment to restore economic growth to around 6 per cent annually.
Turkey will need to boost its economic output to 6 per a year to keep pace with the EU average, which has been in steady decline for decades, he said.
“We cannot go backwards.
We cannot go forward.
We must keep up with the pace that Europe is going,” he said.(Reuters/Ahmet Davutoglu)Turkey has been hit hard by the crisis in Greece, which was forced to abandon the euro after years of neglect.
The economic crisis in Turkey has left a deep scar across the country.
Some economists are predicting that Turkey will enter another recession this fall.
Turkey has suffered an unprecedented economic crisis, with unemployment at nearly 30 per cent on the worst level in the EU.
Unemployment in Turkey is at an all time high.
The Turkish economy has contracted for the second year in a row, while inflation has hit a record high.
Inflation in Turkey hit an unprecedented level of 15.7 per cent last year.
The government said last week it would boost spending by 5.3 billion Turkish Liras ($14 billion) to help revive the economy, but many analysts believe that the plan will not be enough to restore growth.
Turkey is the fourth-largest economy in the European Union and its GDP is expected to expand by more than 5 per 1,000 this year.
Turkey also hosts the world’s largest free-trade zone.
Turkey’s economy has slipped back into recession this year as the government struggles to cope with the impact of an…