The AKP’s surprise victory at Turkey’s snap elections restores political stability, but the new cabinet needs to embark on structural reforms and boost central bank independency to uphold investor confidence amid elevated balance-of-payments risks.
Economic Quarterly Report Dutch version
Economic growth in EMs disappoints again due to lower commodity prices and China’s slowdown. Higher growth in the Eurozone will result in a pick-up of growth in developed countries, but this will not be enough to prevent a slight slowdown in global growth.
Political pressure on the central bank ahead of parliamentary elections contributed to a strong depreciation of the Turkish lira. Concerns about a possible executive presidency after elections and more populist economic policies unnerve investors.