Will Turkey's negative growth rates lead to political crisis?
Early indicators show that Turkey's economy has begun to contract in the third quarter for the first time since 2009, raising the threat of political consequences for the AKP.
Toward the end of the year, when the time comes to disclose Turkey's growth rate in the third quarter, the Turkish Statistical Institute is expected to announce the country's worst rate for the past 27 quarters. The signs are already there, growing clearer every day. In its latest report on Turkey, the International Monetary Fund has already said the year-end rate would be below 3%, a projection that is likely to be revised further downward.
The growth figure for the third quarter is likely to be negative and around 0.5%, meaning that the Turkish economy is contracting for the first time since mid-2009. Moreover, a series of indicators point to a continued slowdown thereafter. In short, the spring for the Turkish economy is over, and it is transiting to a fall season of an unknown length. Whether the fall will give way to winter or a serious crisis also remains unclear.
