“The Eurasia Group’s Naz Masraff kept his negative short- and long-term ratings on Turkey today, writing that over the next month that country will see a new prime minister and cabinet members, probably vote on the opposition party’s leadership, and remove immunity for many legislators as it moves ahead with a constitutional change, which could also mean the potential for violence,” reports Teresa Rivas for Barron’s.
The World Bank projects annual growth to slow to 3.5% this year from 4% in 2015. The government change up may also complicate matters for central bank Governor Murat Cetinkaya as Ankara could press for further rate cuts to bolster economic growth, which may leave the economy open to external shocks, a depreciating lira and inflationary pressures, ETF Trends reported last week.
However, Turkey’s equity market rebounded after Davutoglu vowed the economy would continue to grow without him. Davutoglu’s departure may also help alleviate some of the political uncertainty, according to Erdogan’s chief advisers on the economy, Cemil Ertem.
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