Looking ahead, Turkey still faces growing risk from investment outflows as the U.S. Federal Reserve normalizes interest rates.
Turkey has been tackling a number of economic issues. The country has been suffering an economic downturn due to greater political instability, a struggle against threats from the Islamic State and a renewed war with Kurdish militants in its southeast, reports Michelle Mark for the International Business Times.
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“SocGen doesn’t think Moody’s will lower Turkey’s debt to junk Aug. 5, the next review date, because it won’t have enough data. Analysts Phoenix Kalen and Roxana Hulea note that President Recep Tayyip Erdogan plans an announcement Wednesday, which could either be a referendum on expanding the constitutional power of the president, a snap election, or the reintroduction of the death penalty, which would jeopardize Turkey’s European Union aspirations,” according to Barron’s.
Currently, Turkey is experiencing rising inflation, slowing growth, increased fiscal expenditures, high unemployment and a dip in export competitiveness. The economy is expected to only expand 3% this year.
iShares MSCI Turkey ETF