Coup Attempt Risks Triggering Large-Scale Collapse of Turkish Economy

Sunday, July 17, 2016
By Paul Martin

SputnikNews.com
17.07.2016

The attempt of a military coup in Turkey may result in a long-lasting economic crisis, Bloomberg reported.

Political turmoil could lead to a catastrophe for Turkey because the Turkish economy relies on foreign investment to finance a current-account shortfall.
Analysts predict that in 2016 the budget deficit will widen to 4.5 percent of GDP.

“Even if this coup fails, it is a disaster for Turkey where the risk premium on the political side must move up sharply,” Emad Mostaque, a London-based strategist at emerging-markets consultancy Ecstrat, was cited by Bloomberg.

“This could also act as a catalyst for the next leg down in emerging markets as it sullies the entire asset class. We maintain that political risk is being underpriced by markets,” he added.

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