Turkey's Economic Weakness Fuels a Slow-Burning Political Crisis

Feb 17, 2020 | 10:00 GMT

This photo shows a tea seller plying his wares in a shopping district of Ankara, Turkey.

A Turkish tea seller carries a tray of glasses through the streets of a historic market district in Ankara. Rising inflation and slipping consumer confidence could cause the government in Ankara to continue to pursue an aggressive foreign policy to boost nationalism and buoy its popularity.

(DIEGO CUPOLO/NurPhoto via Getty Images)


  • The fragile fundamentals of the Turkish economy and continued currency volatility could spook investors, eroding the economic stabilization that had enveloped Turkey after its recovery from 2018's currency crisis.
  • Economic pressure won't dissuade the more aggressive foreign policy moves by Turkey's government; in part, they can stoke nationalist sentiment buoying its popularity.
  • As economic confidence declines, the ruling coalition will suffer politically, even if it won't face an electoral toll until 2023 presidential and parliamentary elections.

Creeping inflation, low consumer confidence, stubborn unemployment and a continued preference for hard foreign currency instead of Turkish lira all underscore the Turkish economy’s vulnerability. Although it is showing signs of growth -- from a 0.2 percent increase in the gross domestic product in 2019, the International Monetary Fund projects that the Turkish GDP will post a 3 percent gain in 2020 -- its volatility has weighed on Turkish citizens. This sentiment is driving Ankara's commitment to maintain its assertive course in places like Syria, Libya and the Eastern Mediterranean, banking on increasing nationalist fervor from an aggressive foreign policy to distract from economic malaise. In the process, it appears willing to embrace the risk of exposing Turkey to external economic shocks such as sanctions. Even if Turkey’s government deems that it can withstand the external political and economic pressure to alter its foreign policy, over time, the rising domestic strain will...

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