Some alarming signs from Turkey have sent its exchange traded fund (ETF) down more than 11% today.
The country is suffering from its slowest growth rate in six years, rising inflation and current account deficit, factors that are leading some to question the overall health of Turkey’s economy, reports Hot News Turkey.
In the second quarter of this year, the economy grew a scant 1.9% compared to last year’s 4.1%. In the first quarter of 2008, growth was 6.7%. Overall this year, Turkey expects growth of 4.5%. For several years, growth stood at a robust 7%. Inflation is in the double digits, at 11.8%.
To make matters worse, the Workers’ Party (IP) has made a complaint and demanded an investigation into the Turkish connections of a charity fraud case in Germany, says Hot News Turkey. According to an indictment, donations to the religious charity Deniz Feneri were transferred or sent to pro-government Islamist media in Turkey and even the Prime Minister’s office.
If there is a link between the ruling AKP Party and the charity, it could spell trouble, since the party narrowly survived a closure attempt in July.
Turkey’s hopes of joining the European Union appear to be on hold for now, since the country failed to meet the economic criteria in 2007, reports Fresh Plaza. The average inflation rate of EU members is 2.4%, while the consumer price index was 8.8%. The maximum allowed is 2.8%.
There are five criteria needed by European countries seeking EU membership, laid out in the Treaty of Maastricht. They include a low inflation rate, a low budget deficit and a low long-term interest rate.
TUR hit a high on Aug. 4, but since then has dropped 29.7%. Since its April 1 inception, it’s down 16.4%.