Turkey’s banks present hurdle for Erdogan recovery

Source:Financial Times Date:11May2018

Turkey is far from out of the woods, though, given its long-running structural imbalance between domestic savings and investment. Hung Tran, executive director of the IIF, estimates that Turkey needs to attract foreign capital equivalent to 25 per cent of its GDP every year in order to cover both its large current account deficit and the amortisation of its existing debt.

Given a backdrop of a challenging global environment and domestic political and macroeconomic uncertainty, the only way of achieving this is for Turkish assets to become cheap enough to attract sufficient international investment.