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48 I Southeast Europe bne October 2018
dence index recorded its weakest reading since 2009 in August. “On past form, it is consistent with the economy contracting by around 3% y/y,” Tuvey said.
Capital’s forecasts for stagnation in 2019 and growth of 3.5% in 2020 lie towards the bottom of the consensus.
In finding a way out of the woods, Turkey has so far rejected the options of capital controls and turning to the IMF
– as Argentina did on August 29 – and there is no sign of a breakthrough in fix- ing the rift with the US over issues such as the detention of North Carolina evan- gelical pastor Andrew Brunson. There is also no indication of the President Recep Tayyip Erdogan ending his unconven- tional opposition to interest rate hikes
which the market consensus says would make absolute sense at this point.
The vagueness of Ankara’s response and its failure to acknowledge the scale of the dilemma are frustrating market play- ers. Erdogan, for instance, on August 30 was cited by state-run Anadolu Agency news service as stating that everyone will see that Turkey has options. Quite what they are, nobody is sure of.
JPMorgan, meanwhile, has confirmed data that some $179bn of Turkish exter- nal debt will mature in the year to July 2019, with many substantial payments falling due in the next two months. The total sum is equivalent to nearly a quar- ter of Turkey’s annual economic output. The largest share of the huge debt
burden, some $146bn, is owed by the private sector and banks.
“Financing needs over the next 12 months are large and access to markets has become problematic,” JPMorgan said.
The investment bank on August 23 cut its 2018 growth forecast for Turkey to 3.5% from 3.7% and slashed its expecta- tion for 2019 to 1.1% from 2.8%.
Finance minister Berat Albayrak, known as “the Groom” in Turkey given that
he’s Erdogan’s son-in-law, on August 29 tried to play the calm overseer amid the worsening economic picture, saying that he did not see a big risk either to the economy or the financial system.
this time he gave a final ultimatum to Borissov to change the way the coalition is working and start making decisions more transparently.
On August 31, Borissov demanded the resignation of Interior Minister Valentin Radev, Transport Minister Ivaylo Mos- kovski and Regional Development Min- ister Nikolay Nankov over their political responsibility for a bus crash that killed 17 people and left many more wounded six days earlier.
There are suspicions that the deadly accident could have been caused by defects in the road construction; it was built by Trace Svoge, which is majority- owned by local construction company Trace Group Hold.
All the ministers told to resign are from the quota of Borissov’s GERB party. In a statement over the weekend Simeonov said that his party, the far-right National Front for Salvation of Bulgaria (NFSB), strongly objects to Borissov’s move as it was not coordinated with his coalition partners.
“The frenetic replacement of executives liquidates the statehood and hits badly the possibility for execution of the coalition programme,” Simeonov said in a statement.
Valeri Simeonov gave a final ultimatum to PM Boyko Borissov to change the way the coalition is working and start making decisions more transparently.
Bulgaria’s ruling coalition shaken by resignations
Denitsa Koseva in So a
Bulgaria’s ruling coalition was seriously shaken and came close to collapse following
the resignation of three ministers as Valeri Simeonov, one of the leaders of the junior coalition partner, strongly
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objected to Prime Minister Boyko Borissov’s decision to order the ministers to step down, and threatened to quit.
This is not the first time Simeonov has seemed unhappy with his partners, but