Effect of Ineffective Leadership on Turkish Economy

Turkey as prominent emerging nation enjoyed 6.6 percent of compounded growth rate from 2010 to 2017 due to huge construction upswing. There was a bubble in housing market during the phase which crashed in 2018 as the nation was saddled with mammoth debt burden. The medium- and long-term foreign currency debts of Turkey superseded $328 billion by the end of 2018. As president Mr. Recep Tayyip Erdogan was against of high interest rate, central bank resorted to reduction in interest rate. His quixotic stance caused depreciation of national currency and fueled inflation. Turkish lira depreciated by 35 percent in August 2018 and inflation skyrocketed to the level of 25 percent in October 2018. Economic contraction drove unemployment level to 14 percent in mid 2019 and spiked to reach 17.2 percent in April 2020. To counter the situation, economic policy focused on accclcrating nominal credit growth. But export oriented growth is hampered due to slowdown in European economies. Economic hardship aggravated as tourism sector collapsed completely in wake of global pandemic and export oriented growth faced severe setback. Central bank reserve spent $20 billion to tackle virus epidemic and it drained already depleted coffer. Lira receded record low in May 2020 as inflation went high and economic de-growth indicated imminent recession. People of Turkey remained disgruntled about authoritarian rule full of foolhardy policy measure. President already underwent coup attempt against him in 2016.