Turkey’s troubles deal new blow to stumbling economy

ANKARA (Neo Web Desk)The end to a ceasefire with Kurdish rebels and political uncertainty after inconclusive June elections are compounding already mounting problems for Turkey’s stuttering economy, analysts say.The resumption of regular attacks by Kurdistan Workers’ Party (PKK) rebels in the southeast of the country as Turkish jets bomb their positions in northern Iraq has brought back memories of the 1990s when the country was often in economic, political and security chaos.The deterioration of the security situation is already impacting Turkey’s tourism sector, which has boomed in recent years to become one of the sources of the imp­roved economic prosperity under the rule of President Recep Tayyip Erdogan.Even more disturbing for investors is the spectre of political uncertainty, with the country still without a government after inconclusive June 7 polls and snap elections still a possible scenario.“The resumption of violence with the PKK and the chance of a new election — which may not unblock the political situation — will without doubt have an impact on state expenditure and interest rates which will have to go up,” Inan Demir, chief economist at Finans­bank in Istanbul.The looming risk of early elections “weighs on the investment climate”, he added.Erdogan, prime minister from 2003-2014 and president from 2014, owes his popularity to bringing a new economic prosperity to millions of ordinary Turks, many of them religiously conservative small business owners, who form the core of his support.his week.—AFP

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