Breaking news Analysis of Turkey by the International Finance Institute: If those conditions are met, there will be an increase in capital inflows to Turkey by 2025. Lastminute news
The International Institute of Finance (IIF) has released its report on capital inflows to emerging economies. The report states that net capital inflows to Turkey from abroad will increase in 2025. It is mentioned that this will happen if orthodox policies are maintained. Additionally, it is predicted that despite the slowdown in Turkey's real GDP growth until 2025, it will surpass the average growth of industrialized countries.
The Institute of International Finance (IIF) has published its report on capital inflows to emerging economies without disrupting its current HTML. The report includes evaluations on Turkey, stating that tighter policies have helped reduce the country's current account deficit from $24.6 billion in the first quarter of 2023 to $10.9 billion in the first quarter of 2024 and have facilitated the withdrawal of a significant amount of net capital inflows from abroad. The report also states that if orthodox policies are maintained, it is expected that net capital inflows from foreign residents to Turkey will increase in 2025.
TIGHT POLICIES WILL REDUCE TURKEY'S INTERNAL AND EXTERNAL VULNERABILITIES
Considering that ongoing tight policies will further reduce Turkey's internal and external vulnerabilities, the report states that short-term expectations regarding net capital inflows to Turkey depend on whether investors find the wide yield differentials offered by Turkish assets attractive enough. It is also mentioned that it is expected that wider interest rate differentials will help attract sufficient capital inflows to Turkey.
The report also notes that despite the projected slowdown in Turkey's real Gross Domestic Product (GDP) growth until 2025, it is expected to exceed the average growth of developed countries. This positive growth differential is expected to be another factor that attracts sufficient foreign capital to Turkey, particularly in the form of portfolio and direct foreign investments from abroad.
WHAT IS THE ORTHODOX ECONOMIC MODEL?
The word "Orthodox," derived from the Greek words "orthos" (correct) and "doxa" (belief, doctrine), means "correct belief." The Orthodox economic policy is considered as a branch of mainstream economics based on traditional teachings. This economic model aims to bring the balance between supply and demand to an optimum point.
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