Turkey: Economic reforms to lead to expansion of budget deficit and inefficiencies in longer term – TDS
“Today, Economy Minister Albayrak has announced a package of economic reforms that will be deployed starting in 2019,” notes Cristian Maggio, Head of Emerging Markets Strategy at TD Securities.
“Most of them are aimed at revamping Turkey’s ailing growth and reducing inflation. However, they anticipate greater government interventionism that will lead to an expansion of the budget deficit and inefficiencies in the longer term.”
“Great uncertainty is still surrounding the outcome of the Istanbul mayoral elections. Opposition CHP has won by a narrow margin over the AKP candidate – this has been appealed against, and risks that elections are annulled and repeated grows by the day. Consequences will follow if they annul the vote.”
“An even more contentious dispute, at least in the eyes of foreign investors, will be fought by Turkey and the US/NATO of Turkey’s decision to purchase S-400 missile defense system from Russia. Erdogan reiterated that this is a ‘done deal,’ which may be a prelude to US Congressional sanctions under the CAATSA.”