After taking power in 2002, the Justice and Development Party achieved economic growth through its policies of granting funding to the private sector to carry out mega-projects, pumping credit through commercial banks, and attracting foreign investment.
On April 18, 2018, the Turkish President, Recep Tayyip Erdogan, announced that presidential and parliamentary elections would take place earlier than planned on June 24, 2018.
The coronavirus pandemic (or COVID-19) has struck the economic sectors throughout the world and caused a sudden disruption in the financial and economic activity. Yet the effects of the pandemic have not been even across the various economic sectors in the world. While some sectors were severely affected which led to their bankruptcy and collapse, others were only partially affected. In contrast, some economic sectors thrived with the increase in market demand for their services such as the health sector. The decisive factor determining the extent and depth of those effects will be the duration of the pandemic in a country and the lockdown and quarantine measures that the government has to take.
The above applies to Turkey as well, except for one important difference, namely that the coronavirus pandemic erupted at a time when Turkey had already been experiencing a significant financial crisis. That is why the consequences of the pandemic are expected to be twofold for the Turkish economy.
The financial crisis broke out in Turkey for cumulative reasons even before the emergence of the coronavirus pandemic. While the negative effects of the global pandemic will emerge during this summer in Turkey, the pandemic has destroyed government hopes and plans for economic recovery, albeit relatively, this year.
This paper looks into the reasons for the current Turkish lira crisis and the solutions available to the government to overcome it or manage it for a longer period.
Turkey is today undergoing significant political turbulence. President Erdogan’s popularity is in decline and the incumbent Justice and Development Party (AKP) appears increasingly vulnerable to
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