Economic stability is getting more difficult

As we enter the last months of the year, which was expected to be difficult, the latest developments in domestic and foreign policies increase these complications more. Clearly, it is difficult to ensure stability in the economy at a time when nothing goes in its normal pace.
 
The discomfort - originating from the Federal Reserve - of developing countries like us, increased again in the global economy. Fed gave the signals of decreasing liquidity in October, making another interest rate increase in December and making three interest rate increases in the coming year. It is clear that countries like us, which can only grow with hot money, will have difficult days with regard to the decrease of the resource.
 
Amid facing such a serious problem globally, strange things started happening in the country. In fact, there were already strange things happening, but they have grown extensively in the last days.
 
We already knew that it was not a normal progress, as the name implies, the state of emergency process we are living today. The internal and external developments in recent days increased the unusual level rather well.
 
Finally, the postponement of the exchange and chamber elections for six months yesterday is also a proof that abnormal things are happening in the business world. 
 
This week, it will not be a surprise for anyone when markets open amid the tension emerging from northern Iraq. 
 
The results of the referendum, the attitude of the surrounding countries and the Iraqi central government, besides the sanctions Turkey will impose, must be closely watched during this entire week.
 
Let’s not forget that a possible struggle in northern Iraq can harm the whole region. Here, let’s also remember that we are talking about a neighbor with whom Turkey has the best trade relations. 
 
Even only in the case of finishing the border trade, it is clear that especially producers and traders in the area will be left in a difficult situation and the transport sector will be heavily damaged.
 
Also, if we consider that almost all of the investment and consumption needs of northern Iraq are totally supplied by Turkey, it is inevitable that the people living in northern Iraq and Turkey will also suffer major damages from these ongoing developments. 
 
We hope that the issue of northern Iraq does not become the source of a bigger conflict in the region.
 
It has already become clear that the process of clearing the region of the Islamic State of Iraq and the Levant (ISIL) will be a difficult period for Turkey. And on top of it, the addition of this issue will increase the difficulty.
 
Avoiding the expansion of this issue is for the benefit of economic stability in Turkey definitely with regards to not only the political developments but also the protection of the macro balances and keeping the hopes alive in returning the financial discipline. 
 
The Turkish economy can no longer carry any more new burdens.

It seems the financial balance disturbed by the referendum somehow is not able to be rebuilt. 

The debt limits were exceeded in the first eight months and the government must increase the debt limits with the law in the new term of the Turkish parliament. 

Even the public’s internal and external debt indicators which were shown as indicators of stability for many years are going bad rapidly.
 
The private sector’s external debts have increased a lot. It means that the total debt of Turkey was already big. A recent data shows that the amount of the short-term debts that must be paid in one year will overwhelm the financial balances in a tight period like this.  
 
It is very clear that together with the difficulties of reducing inflation from double digits and again going for the increase trend because of the Fed expectations on the exchange will create immense difficulties on the macro balances.
 
In a situation like this, economy bureaucrats are making budget and program studies of 2018 and they are having difficulties in this. It looks like the latest developments will complicate economic stability and the search for the macro balance even more.