Financial MELTDOWN: Shock graph shows how Turkey and Argentina economies are DOOMED
TURKEY and Argentina, two of the world’s biggest emerging markets, have been plunged into economic turmoil, according to shock new figures.
By TOM PARFITT
Express.co.uk
Fri, Jun 1, 2018
Both countries’ currencies – the lira and the pesos respectively – have gone into freefall in recent months due to panic-selling by investors.
Michael Cembalest, a financial expert at JP Morgan Asset Management, said emerging market (EMs) were underperforming by 2.5 percent so far this year.
He added: “Investor fears are focused on the impact of rising US interest rates and the rising US dollar on EM external debt, and on rising oil prices.
“A closer look shows that the market reaction has been orderly so far, with Argentina and Turkey leading the way down.”
Financial blog ZeroHedge added that “both Turkey and Argentina appear to be doomed”.
Turkey’s economy has been particularly badly affected, with inflation in the country rising to about 10 per cent.
The weak lira means imports to Turkey – which has a large trade deficit – are expected to soar, including fuel.
Mr Cembalest said: “Turkey looks like an unstable EM economy of the 1980s and 1990s, and is a country whose problems should not be over-generalised.”
Some experts believe President Recep Tayyip Erdogan may have worsened the situation by trying to curb the independence of Turkey’s central bank.
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