Jun 05 2018

Turkey fast approaching economic crisis - DW

Turkey is fast approaching an economic crisis as President Recep Tayyip Erdoğan prepares to battle his political opponents in elections on June 24, Deutsche Welle reported.

While Erdoğan cited regional developments, including the war in neighbouring Syria, as reasons for bringing forward the presidential and parliamentary elections from November next year, it is much more likely that the real reason was the economy, Germany’s public international broadcaster said.

Investors are losing confidence in Turkey, the lira is rapidly losing value and tourists are staying away as Erdoğan prepares to introduce a full presidential system of government and cracks down on his opponents, Deutsche Welle said.

The lira slumped to a record low of 3.92 per dollar two weeks ago, sparking fears of a full-blown currency crisis. The central bank has since raised interest rates to 16.5 percent in an effort to stem the decline, which has spurred inflation to 12.2 percent.

Erdoğan is like the magician of the ruling Justice and Development Party (AKP) as without him the party would just be another political group, the broadcaster said citing Turkish journalist Ozlem Topcu.

The president is therefore likely to fare better in the election than his party, opening the way for the AKP to lose its legislative majority. That might create a political blockade and fresh elections, much like those that occurred in 2015, Topcu said.