The Fragileity Of The Turkish Economy

Abstract

The weakness in Turkey's economic structure has been an important subject of investigation for many years. The fact that the economic model in the country generally focuses on domestic demand and expenditures deepens structural problems such as chronic current account deficit by increasing dependence on external financing. This situation makes economic growth sensitive to external influences. Especially in periods of high growth, the increase in imports and the increase in foreign exchange demand further deepen the current account deficit, while the decrease in domestic demand in periods of economic contraction may narrow the current account deficit, but this process may bring about investment and job losses. Key factors that increase Turkey's economic vulnerabilities include external debt burden, exchange rate fluctuation and high inflation. These structural problems, which are directly related to economic growth performance, need to be solved and dependence on external financing should be reduced.