Turkey needs to reassure foreign investors

After the failed coup, Turkey remains a central concern of economic observers. According to reports from Bloomberg, political instability would become a disaster for the country, which currently finances the majority of its expenditure and investment projects with foreign capital. The opinion of analysts is that the budget deficit will rise up to 4.5% of GDP.

"It 's bad news for investors, however it ends." So Emad Mostaque, head of the consulting firm Ecstrat strategies – specializing in emerging markets – said talking to Blooomberg the attempted coup d'état in Turkey. The failure of the coup, setting that has materialized in the night, "will sweep away all resistance AKP", the party of President Erdogan, explained Mostaque, foreshadowing "an increase in the risk premium for the shares of the Turkish groups in following an increase in political tension in the country. In fact the economic repercussions were felt immediately, with the collapse of the Turkish lira at the lowest value of the last eight years: the currency has lost 4.78% to 3.0157 against the dollar, in the hours when the population thronged to the ATM to withdraw cash.

In the medium term, according to analysts, there will be internal effects in terms of foreign investment from which the country is heavily dependent to fund its deficit. "Turkey has a great need for external loans and is emerging from a credit boom period," he wrote in a report quoted by Bloomberg Neil Shearing, chief economist at Capital Economics specializing in the emerging. "In this scenario, a prolonged period of political instability can trigger a serious decline of the economy".

In that case the consequences will be too heavy for business partners in Ankara, especially Germany, Russia, China, United States, Italy and Iran lead the way.