ANKARA: The end to a cease-fire with Kurdish rebels and political uncertainty after inconclusive June elections are compounding already mounting problems for Turkey’s stuttering economy, analysts say.
The resumption of regular attacks by Kurdistan Workers’ Party (PKK) rebels in the southeast of the country as Turkish jets bomb their positions in northern Iraq has brought back memories of the 1990s when the country was often in economic, political and security chaos.
The deterioration of the security situation is already impacting Turkey’s tourism sector, which has boomed in recent years to become one of the sources of the improved economic prosperity under the rule of President Recep Tayyip Erdogan.
Even more disturbing for investors is the specter of political uncertainty, with the country still without a government after inconclusive June 7 polls and snap elections still a possible scenario.
The resumption of violence with the PKK and the chance of a new election – which may not unblock the political situation – will without doubt have an impact on state expenditure and interest rates which will have to go up,” and Inan Demir, chief economist at Finansbank in Istanbul.
The looming risk of early elections “weighs on the investment climate,” he added.
Shiite Iran, an ally of President Bashar al-Assad, has urged Turkey to respect Syria’s sovereignty in its bombing of IS targets.
Any action that leads to the weakening of national governments can, in effect, encourage terrorist groups to fulfil their criminal actions,” Iran’s Foreign Ministry spokeswoman Marzieh Afkham said.
In his phone call, Rouhani also suggested Turkey should “coordinate” attacks with both Syrian and Iraqi governments.
Any operation against terrorism necessitates the coordination with the countries’ central governments,” he said.
