The Future Remains Bright for Turkey

The Future Remains Bright for Turkey - at www.moneyweek.com - the best of the international financial media

Economists are not remarkably good at understanding one-time structural changes. Analysing large, one-time structural changes just like the one the Turkish economy is experiencing in real time is not a simple mission. Therefore, we need to keep testing our long-term convictions against shorter-term challenges and also reassessing the effect of noise-driven fluctuations on long-term trends.

Some analysts see increasing risks in Turkey's economy and financial markets, quoting the political noise coming out of European capitals and focusing on external imbalances. Though we do not want to get into a lengthy discussion on the validity of these concerns, we should point out that fundamental variables do not point to a heightened vulnerability. Indeed, thanks to prudent policies and far-reaching institutional and structural reforms, the economy is much more resilient to exogenous' shocks, compared with the previous episodes of investor anxiety leading to a sudden liquidity crunch and a deep recession.

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