The core of Turkey's economic woes

[abomvubuso]

The Turkish economy has deteriorated in recent months, and not so much due to the fallout with the US. In fact it was because of a series of bad political and economic decisions. Things got worse in recent weeks, when rumours started circulating around the market about possible intervention by the IMF. Sure, a foreign involvement in Turkey's economic woes would only be warranted if the new government measures prove inefficient and don't allow the stabilisation of the Lira without touching the interest rates. Some experts are concerned that the now re-elected president Erdogan could impose government control on capital flows, which would be a disaster.

Savour the thought. The Turkish lira has lost two-thirds of its value since Erdogan came to power.

Now, about those government measures. Erdogan's finance minister said they're planning to cut government expenses by $ 5.6bn by the end of the year, and work hard to restore trust in the national currency. The economic plan, however, doesn't make it very clear what particular steps would be taken to stabilise the Lira (which has taken a nearly 20% downturn in just a couple of weeks, and further 20% since the beginning of the year), and how exactly the investor confidence would be repaired.

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