Al Ain News
Sunday 6/9/2020 06:09 PM Abu Dhabi time
–
–
An international financial institution warned today, Sunday, of a dark future for the Turkish economy, in light of high inflation rates and the failure to repay international loans.
The “Oxford Economics” economic consultancy likened the Turkish economic situation at the present time to the Argentine economy besieged by debt.
Argentina is facing increasing budget deficits, high inflation and fluctuations in the foreign exchange rate, which have exacerbated under the weight of the Coronavirus pandemic. The economy is expected to contract by more than ten percent this year.
And after less than two years of the life of the largest loan in the history of the International Monetary Fund, Argentina has returned to the International Foundation to get rid of the blockade of lenders that threatens the largest economy of South America bankruptcy.
The Argentine government has formally requested the start of negotiations with the International Monetary Fund on a new financial aid program.
The report of the International Financial Corporation stated that Turkey comes after Argentina in terms of monetary expansion in developing countries, warning that increasing loans to individuals and companies would raise inflation rates.
He indicated that the rise in inflation rates is not a good indicator for Turkey, amid the decline in the financing capacity of the central bank.
He also stressed that “Argentina is facing ambiguity about the fiscal deficit in 2021, and Turkey is witnessing a rapid increase in the rates of citizens’ lending.”
Commenting on the report of the International Foundation, Turkish economist Murat Kubilay said that the decline in domestic demand in Argentina as a result of the Corona epidemic has caused a decline in inflation rates, but that these rates are witnessing big jumps in Turkey.
The expert pointed out that there is an increase in foreign currency and gold requests in Turkey, but it is not known who gets these currencies.
He pointed out that “there is an urgent need for the economic administration in Turkey to show a kind of transparency and confidence in order for it to stop the path similar to the one that Argentina went through.”
The Turkish economy suffers from a severe crisis, as the Turkish lira fell against the dollar to its lowest levels, and the rate of inflation increased.
A report by the American Foreign Policy magazine confirmed that Erdogan’s insistence on redoubling the previous mistakes will bring more economic damage to Turkey, with financial and geopolitical consequences that will continue beyond the end.
Turkey’s total external debt owed within a year jumped at the end of May, amid a sharp decline in the country’s foreign exchange reserves and a deteriorating lira.
The Turkish Central Bank said that Turkey’s external debt owed within a year or less amounted to $ 169.5 billion at the end of May, up about $ 5 billion from the previous month.
–
