International rating agencyMoodyIn a report on Thursday (November 8), Turkey and Argentina will shrink sharply in the coming quarters as economic growth slows in developed and emerging market economies.
As monetary austerity in major economies and trade disputes continue to undermine global investment, Moody's is increasingly pessimistic about the growth prospects of emerging markets such as Turkey and Argentina, which are relatively vulnerable to external financing risks and therefore the most vulnerable.
The rating agency said that Turkey's economy may shrink in the first half of next year, as the lira's slump and rising borrowing costs will have a negative impact on the economy. Due to internationalMonetary FundThe currency and fiscal consolidation under the organization (IMF) plan, the Argentine economy will not resume positive growth until 2020.
Since President Recep Tayyip Erdogan took office 15 years ago, Turkey’s inflation rate has remained high, and high borrowing costs have cast a shadow over investment prospects. Moody's said, "double-digit inflation, borrowing costs have risen sharply andbankThe reduction in loans may put pressure on household purchasing power, private consumption and investment."
Moody expects due to exchange rates andOil pricePressure stimulus, Turkey's inflation will maintain double-digit growth by 2020. Inflation in Turkey climbed to 25.2% in October, as the weak lira continued to push consumer prices up.
Moody's believes that Turkey's economy has grown by 1.5% in 2018 and is expected to fall by 2% next year. It predicts that the Argentine economy will fall by 2.5% this year and by 1.5% in 2019.
(Article source: Global Forex Network)