For several years, the Turkish economy has managed to keep its balance despite teetering on the brink of major problems. In 2013, the notorious "taper tantrum" exposed Turkey as one of the Fragile Five countries that would be most affected by an expected tightening in U.S. monetary policy, and the outlook for the country appeared bleak. But Turkey has broadly defied its naysayers. In the years since, its gross domestic product has grown steadily, inflation has been manageable and it has had no major debt defaults, all despite the fear that U.S. interest rate increases would actually come to fruition. Favorable circumstances have helped the Turkish economy defy the gloomy expectations -- particularly the 2014-15 drop in global oil prices. But as oil prices stabilize and other positive factors fade away, Turkey looks likely to suffer greater economic hardship over the coming months....
