Mecklai graph of the day: Stalling growth in Turkey

Mecklai graph of the day: Stalling growth in Turkey

Turkey's economy has been booming and has seen incredible economic growth over the past several years. The accelerated pace in expansion can be attributed to the Erdogan government and its economic policies, which have led to a higher growth rate in a developing country like Turkey. FDI in Turkey has jumped from a couple of billion dollars in 2004, to nearly USD 16 billion in 2011.

However, in the recent past the rate of economic growth has slowed sharply to 1.4 percent in Dec 2012. Protests have spread like wildfire across the country opposing the increasingly authoritarian rule of Prime Minister Recep Tayyip Erdogan. The liquidity has completely disappeared in the Turkish market as investors have fled since protests and unrest gripping the nation might continue indefinitely. Jitters were particularly felt in Turkey's stock market, which plunged by more than 10 percent - its sharpest drop in 10 years. Given the current situation in the region, a prolonged period of unrest could spell significant trouble for Turkey given its reliance on foreign capital and tourism.

Whether or not Turkey is a long-run development success remains to be seen. The recent events in Taksim Square and in other Turkish cities are a stark reminder of the country's still-weak institutional infrastructure.

The below graph shows the GDP of Turkey since 2009.

 

 

 

 

 

 

 

 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More