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Turkey’s megaprojects threaten ‘mega’ financial havoc

Turkey’s government might be forced to nationalize some megaproject investments, chief among them the new airport in Istanbul, which have hit dire straits under the combined impact of the COVID-19 pandemic and Turkey’s existing economic woes.
A Turkish Airlines Airbus A320-200 plane is seen on the tarmac of the city's new Istanbul Airport in Istanbul, Turkey, April 6, 2019. REUTERS/Umit Bektas - RC1E1602C690
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Turkey’s “megaprojects” — a slew of multibillion-dollar infrastructure investments that Ankara has showcased as a hallmark of its economic success — are increasingly turning into a financial quagmire under the combined impact of the COVID-19 crisis and Turkey’s underlying economic woes. Istanbul’s posh new airport is likely to be first in line in potential nationalizations that Ankara might be forced to consider amid growing uncertainty on whether giant transport investments could survive as profitable ventures.

In Turkey, the economic fallout of the pandemic came atop ongoing fragilities that had already stymied economic growth in the past two years. In its April forecast, the International Monetary Fund projected that the Turkish economy would contract at least 5% this year, while leading indicators suggest the shrinkage could be even worse. 

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