Turkey lira CRISIS: ‘Clearest sign yet’ Turkey is heading for RECESSION in latest plunge

Monday, October 1, 2018
By Paul Martin

TURKEY has been dealt further financial backlash as manufacturing activity slid to its lowest level in nine years, according to a business survey today.

Mon, Oct 1, 2018

Economists fear this is among the clearest signs yet that Turkey is headed for a deep recession after months of currency turmoil which has seen the value of the lira plummet.

The lira has tumbled a staggering 40 percent against the US dollar so far this year.

The crisis has been painful for residences with the cost of fuel and food subsequently soaring, further raising concern about the risk to banks and the broader economy.

Sources also suggest authorities have hiked electricity and natural gas prices for the third month running, adding even more woes for residents and businesses.

The currency crisis is rooted in concerns about President Tayyip Erdogan’s influence on the central bank, and being later worsened by escalating tensions with the United States.

Ankara has seen duties on aluminium and steel imported from Turkey doubled on orders by US President Donald Trump.

In response, President Erdogan hit goods imported from the United States with heavy tariffs, with extra duties on products including cars, alcohol and tobacco.

The Purchasing Managers’ Index (PMI) fell to its lowest since March 2009, the survey from Istanbul Chamber of Industry and IHS Markit showed.

This is believed to have been a result of a slowdown in output and new orders.

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