“Turkey’s economy has plunged into recession and economic activity has been held back by high interest rates as the country’s central bank struggled to curb inflation.”, — write: epravda.com.ua
Turkey’s economy has plunged into recession and economic activity has been held back by high interest rates as the country’s central bank struggled to curb inflation. This is reported by The Wall Street Journal. Gross domestic product shrank 0.2% quarter-on-quarter in the July-September period, matching the decline in the previous quarter, which was revised downward. A recession is usually defined as two consecutive quarters in which economic output declines. Compared to the same quarter in 2023, the Turkish economy grew by 2.1%, the slowest pace since the economic shock caused by the Covid-19 pandemic in the second quarter of 2020.Advertisement: The decline was driven by a drop in household consumption, which shrank by a quarter , while government spending also decreased. However, exports rose in the third quarter, boosted by summer tourism, while imports fell.Advertisement: The contraction came after Turkey’s central bank kept its key interest rate at 50%, unchanged since January this year and the highest level in 20 years . The bank tried to curb skyrocketing inflation, which reached 49% in October, although it was significantly lower than in the spring. The rate hike cycle began in mid-2023 when the bank reversed the monetary policy promoted by President Recep Tayyip Erdogan, which had kept rates low. We will remind: Turkey is conducting negotiations with the USA on softening the sanctions regime, which will allow the country to continue using the Russian Gazprombank to pay for the import of natural gas from the Russian Federation. The European Union Anti-Fraud Office is investigating the supply of Russian oil products to the EU to circumvent sanctions through Turkey.
