… ..The economy was just beginning to recover this year after slowing to 2.9 percent in 2014, with growth pegged at a better-than-expected 4.8 percent in the first quarter. Concern about economic hardship was a major motivation behind Erdogan’s move to ease tensions with Russia, Egypt and Israel in June. He has even hinted at backing down from his demand that Syrian President Bashar al-Assad must go as a precondition for peace.

While the quick suppression of the coup meant economic policy hasn’t shifted, the attempted takeover and the harsh response have hurt investor confidence.

Fitch and Standard & Poor’s – two of the leading credit-rating agencies – downgraded their views of the Turkish economy, while Moody’s has left its rating unchanged so far. The Turkish lira plunged as much as six percent in the days after the coup but has since recovered.

Key risks for the economy

Nevertheless, investors remain cautious and have adopted a wait-and-see attitude to get a better idea of how far the political purges will go and how they will affect the business community.

Here are a few of the key risks they’ll be following closely to see how Erdogan’s response will affect the economy’s long-term outlook.

First, a widespread purge that reaches into the hundreds of thousands might cause a political backlash and social instability. The remarkable support of opposition parties for the AKP government after the coup might come to an end, while the forced resignation of a large number of university presidents and deans could lead to student unrest.  ……

For full article go to: https://theconversation.com/how-will-turkeys-failed-coup-and-massive-purge-affect-its-economic-future-62947


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