Aug 14 2018

Turkish economic risks are more dangerous than Trump - Forbes

Although the proximate cause of a recent collapse in the value in the lira is sanctions imposed on the economy by U.S. President Donald Trump, it is weaknesses in the underlying economy and a lack of a plan to solve upcoming problems that are most dangerous to Turkey, Kenneth Rapoza wrote in Forbes.

“In other words, Turkey’s economy will survive Trump. In the meantime, it might not survive its own monetary policy,” Rapoza said.

“The country needs to something about inflation, which means a weaker currency and higher interest rates, opposed by Erdogan. It now needs a resolution to its dispute with the U.S. about the jailed pastor (Andrew Brunson), also opposed by Erdogan.”

Turkey had alienated those allies who could have provided financing for the country, while other options were facing financial pressures of their own, Rapoza said.