Rumours about the Federal Reserve System’s plans to close down programs for stimulation of economic growth of developing states in the past months have caused economic aggravations in Turkey. The foreign capital is flowing out of Turkey, the government has been suppressing protesters and pressurizing Syria, Interfax reports.
Turkish Prime Minister Recep Tayyip Erdogan said in May that Turkey will become one of the top 10 economies of the world, but the stock market lost a third of its worth in mid-May. Income of state bonds increased to 10%. The Turkish Central Bank spent over 15% of its reserves.
Mert Ildiz, chief economist for Turkish markets at Burgan Bank, noted the upcoming recession. He said that Turkish assets were no longer popular and the lira had one of the worst growth rates of emerging markets.
Turkey has a foreign debt of about $350 billion. Over half of it needs to be paid off or refinanced in a year. Morgan Stanley put Turkey on the list of 5 states most susceptible to outflow of foreign capital.
