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A big reason for the coming Turkish Economic Collapse
from Al_GuardianThe crash of the Turkish lira last week after two years of steady decline spooked global markets ‐ but anyone looking at Istanbul’s skyline would have been far from surprised. Everywhere you look in the city, evidence of a debt-fuelled construction boom abounds: new skyscrapers frame the horizon, huge shopping malls dot the streets and among several megaprojects is a new airport, set to be the world's largest. Turkey is also heavily reliant on imports for construction materials: it is the world's ninth largest importer of steel, paying $8bn in 2016, a figure that rose to $9bn in 2017 as the lira began to fall. That makes the Turkish economy's dependence on the construction sector for growth particularly dangerous. In the third quarter of 2017, construction made up 18.7% of the economy. This over-reliance on an industry that is so sensitive to global downturns has long been criticized by Turkish economists. I personally had, in 2009, expected the Turkish economy to crash by 2014 but I didn't have the insight that Turkey's businesses could fool so many western banks into lending them money. Posted by: lord garth 2018-08-27 |
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