Turkey's economic policy shift is not worth the risks

Significance

The lira’s collapse has only fortified President Recep Tayyip Erdogan’s adherence to unorthodox low-interest-rate policies. Rather than changing course, Erdogan has publicly declared a “new economic policy”, stating more than once, “We know what we’re doing”.

Impacts

• Not everyone will be compensated for inflation, and discontent will persist, along with the need for other ploys to win elections in 2023.
• High inflation and unpredictable government policy will add to the challenges of doing business.
• Ankara may continue to develop relations with countries able to provide funds and investment, such as Qatar and the United Arab Emirates.