The statement implies that a return to economic orthodoxy is likely, following two years of unorthodox policies built around Erdogan’s preference for low interest rates. The policies have contributed to high inflation, pressures on the banking system and a looming balance of payments crisis.
Businesses operating in Turkey will likely face tight credit conditions, sluggish demand and only a partial reduction in inflation.
Turkey will remain a risky market in terms of macroeconomic stability for potential foreign direct and financial investors.
Inequalities and relative poverty could increase, including for refugees, whose presence will continue to be resented.
If orthodox policies falter, an unpopular IMF agreement might be required or arguments for a more guided economy may re-emerge.
