Turkey In 2018: It's Not The Economy, It Will Be All About Erdoğan

As speculation grows on the Turkish economy and its wobbly journey ahead, what matters may not be the state of finances, but the person who rules over it, Mark Bentley argues in this extremely informative analysis.

Despite a call for a reset in relations with the European Union, Turkey’s biggest trading partner and source of foreign investment, Erdoğan is doing little of substance to put relations back on track, save for ordering a few airbuses from French President Emmanuel Macron. The EU is asking the Turkish president to reinvigorate democratic reform and stick to the rule of law to further economic and political ties. But he is not interested.

Experts such as Tim Ash say that while Erdoğan’s harsh language suggests a very confrontational approach that might be aimed at keeping the domestic Turkish audience in hypnosis, 'it resonates badly in the United States and beyond'.

So, in light of the steadily increasing political tensions between Erdoğan and both Washington and Brussels, it comes as no surprise that investors are shying away from investing in Turkey.

But Turkey badly needs foreign capital to finance its increasing current account deficit. And, due to the showdown, foreigners are shying away more and more from there.

Bentley explains with help of some key figures here.