Turkey’s economy has remained relatively resilient against the uptick in political instability, especially since the 2015 general elections. A large population, diversified and dynamic private sector, strong export linkages, robust credit growth, consumers’ aspirational spending habits, and government efforts to increase the quality and provision of public services from healthcare to education to infrastructure, sustain strong demand growth for MNCs across sectors.
However, the economy’s structural vulnerabilities are exacerbating exchange rate volatility, while political tensions and uncertainty are keeping confidence and private sector investment levels low. At a moment when the country needs urgent structural reforms and a stabilization of the economy, Turkey’s public sector institutions will also be shifting to a presidential system. The transition period holds potential risks for the country’s economy and for MNCs doing businesses in Turkey.
Zeynep Kosereisoglu, FSG’s Practice Leader for MENA and Turkey, was recently interviewed by FocusEconomics to discuss the future of the Turkish economy and what the election results mean for MNCs. In the interview, she touches upon Turkey’s fiscal policy, further lira depreciation, and increased political risk.
FSG clients can find more strategies in our new report: Turkey 2023: Outlook and Scenarios
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