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Southeast Europe
August 24, 2018 www.intellinews.com I Page 14
Third of Turkey’s GDP ‘may be wiped out by recession’
bne IntelliNews
The recession that is widely expected to hit Tur- key by next year could shrink the country’s GDP from around to $850bn to $594bn, the lowest level recorded since 2006, according to Standard & Poor's.
The unprecedented drop in wealth would be a big material and psychological blow to the Turks who, as recently as 2013, were on the verge of having
a one-trillion-dollar economy. As things stand, Turkey has the world’s 17th largest nominal economic output and 13th largest by purchasing power parity (PPP), according to the International Monetary Fund (IMF).
Meanwhile, jitters over escalating tensions be- tween Nato allies Turkey and the US following their tit-for-tat sanctions exchange over Ankara’s refusal to release North Carolina pastor Andrew Brunson—on trial for what Washington says are contrived terror-related and espionage charges— were not helped by an incident on early on August 20 in which gunshots were fired at the US embas- sy in Ankara. US and American officials said there were no casualties. Three of six fired shots hit the embassy’s iron gate and window wall, the Ankara governor’s office said.
Anti-US sentiment is growing among Turks as the economic stress tightens. As the Brunson dispute mounted, US President Donald Trump on August 10 doubled the tariffs on aluminium and steel imports from Turkey, prompting Ankara to sharply hike tariffs on several US products and Presi- dent Recep Tayyip Erdogan to call for a boycott
on American electronics. The diplomatic standoff
Five years ago the Turks were not far off having a trillion-dollar economy. Soon they might have to content themselves with not much more than half of that. Pictured is the Grand Mosque of Bursa.
sent the already embattled Turkish lira (TRY) into freefall against the dollar, and raised anxieties that Turkey’s currency crisis may have reached such a degree that a debt and liquidity crisis is around the corner. The TRY is down by around 40% against the dollar in the year to date.
Erdogan’s words on an electronics boycott has led to some Turks destroying iPhones using sledge- hammers, handguns, fire and other means, before posting videos of their exploits on social media.
‘Their goal is to bring us to our knees’
In a televised address at the weekend, Erdogan continued to deny that Turkey’s financial turmoil is down to its economic fundamentals. He repeated his claim that it is the result of an economic at- tack mounted by outside forces. “The attack on our economy has absolutely no difference from at- tacks on our call to prayer and our flag. The goal is the same. The goal is to bring Turkey and the Turkish people to their knees—to take it prisoner,” Erdogan said in the address.
“Those who think they can make Turkey give in with the exchange rate will soon see that they are mistaken,” he added.
Erdogan stopped short of directly naming any countries or institutions he said were behind the attack, but he has, in the past, blamed a shadowy “interest rate lobby”, Western ratings agencies and financiers.
To address the growing economic crisis, Turkey’s finance minister has announced what could turn