A leading Turkish economist and columnist is predicting that as soon as the Turkey’s local government elections next year are done and dusted, the government could well head to the International Monetary Fund (IMF) for a $60 billion bailout.
Well-known Turkish economist Uğur Gürses says that current economic data point to
a crisis and stagflation (a stagnant economy with high inflation and
and high unemployment).
Gürses believes that the government will manage to contain the crisis up until next year’s local government elections that have to be held before the end of March, but after that he believes that the government of President Recep Tayyip Erdogan will have no choice but to approach the IMF for a bailout.
After the local elections no alternative lefts than IMF for Turkey
“After the elections, it will be the IMF to the rescue. However, 10 to 20 billion (dollars) is not enough. At least a (bailout) fund of 50 to 60 billion dollars is needed. Even if we don’t want the IMF (money), they seem to be the only alternative,” Gürses stated at “The Brand Conference 2018” in Istanbul, Turkey, which was held on 12-13 December.
Gürses says the country’s crisis is serious. “We need a diagnosis. This is a proper economic crisis, a recession.”
He further noted that the current situation is similar to the economic crises of 1992 and 2001.
According to Gürses, the IMF will not provide a 60 billion fund as soon as Turkey asks for assistance. “Turkey will need to implement measures. There will need to be improvements in democracy, rights and freedoms and rule of law. The only solution to overcoming the crisis is further democratization. Turkey will need to work on this on its own and clean its own backyard,” he said.
Turkey’s economy has taken a hammering as the local currency was battered over concerns over the large foreign currency denominated debt, tensions with the US as well as the government’s reluctance to raise interest rates to combat inflationary pressures. By August this year the lira had fallen as much as 47 percent against the dollar. It has since recovered slightly, meaning that it has lost 30 percent of its value since the beginning of the year, but according to some reports the country’s inflation hit a 15-year peak last month.