Turkish Economy: The Rot Started Before The Disease

Turkish Economy never truly recovered rom the 2016 coup attempt.  It was followed by an increasingly authoritarian Erdogan regime, whose crackdown on dissidents, opposition and in fact the free market and banks destroyed “animal spirits” in the country. GDP rose by only 0.9% in 2019, to achieve which substantial fiscal and monetary ammunition was wasted. Covid-19 simply exacerbated the stagnation in the economy and made the recession official.  As the battle with the outbreak continues, Erdogan  had claimed an early victory, shooting for a V shaped recovery. That is impossible. Arbitrary fiscal and monetary policy decisions, an inadequate relief package, and millions of people dropping out of the workforce foretell a secular stagnation for the Turkish economy. In some sense, this is the story of great potential wasted because of one-man rule.

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