Growth estimates for 2016 are continuing to drop as the year-end approaches. While international agencies continue to lower Turkey’s growth estimates, it is now widely expected that growth will dip below 3 percent.
Slowing growth rates and the rapid increase in foreign exchange rates have demoralized Turkey’s business world. The current state of affairs in the economy not only troubles the banking sector, but also the entire business world, primarily the indebted real sector.
With the Turkish Lira’s devaluation against the dollar continuing to accelerate, a new record is broken almost every day. The expectation of the markets is that the devaluation of the lira will not stop soon; in fact, it will only continue.
The troubled air that has been felt for some time in the economy is not dispersing. While the biggest and most essential issue in the economy seems to be slowing growth, the depressed business world is not cheering up.
A milder course has been followed since the beginning of the week, but expectations on foreign exchange rates are worsening. We see that the estimates of foreign analysts, especially on the Turkish Lira value of the U.S. dollar exchange rate, are increasing.
The fever is high on the exchange rates. The Turkish Lira hit a record low against the dollar and the conviction that this will continue is becoming more deep-rooted.
The government has lowered this year’s growth target to 3.2 percent, but even this figure now looks hard to reach
The September inflation figures in Turkey turned out to be much better than expected. Markets were expecting a 0.70 percent Consumer Price Index (CPI) increase but it actually occurred at a much lower level, at 0.18 percent.
The Moody’s rating cut last week is continuing to draw a fierce reaction, especially from the government. But we can expect these reactions to calm down after a week or so
