Analysts are worried about the future of Turkey’s economy. The country has suffered under doubt about its future during a rift with Washington D.C. over Turkey’s proposed missile purchases from Russia. David Gauthier-Villars reports at The Wall Street Journal:
The Turkish economy shrank at the end of 2018 and looks set to contract further this year, presenting a challenge for President Recep Tayyip Erdogan ahead of a critical electoral test for his ruling party and amid renewed diplomatic tensions with the U.S.
Amid mounting popular discontent triggered by rising food prices and unemployment, domestic consumption and construction contracted sharply in the fourth quarter. Turkey’s output contracted 3% in the fourth quarter, a sharp change of fortune for an economy which expanded 7.3% in the same period a year ago, according to data released by Turkey’s national statistics agency on Monday.
Mr. Erdogan pledged to foster greater prosperity when he won re-election in June, but the deteriorating economic picture has seen support fall for his Justice and Development Party ahead of municipal elections at the end of the month.
Complicating the economic picture for Mr. Erdogan is the spat with Washington over Turkey’s planned purchase of advanced missile systems from Russia, which has spread jitters among investors and weighing on the Turkish lira, one of the worst-performing emerging-market currencies so far this year.
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