Turkey, which launched and ended a military operaiton in the North of Syria in October, has now a recent US House of Representatives resolution calling the early 20th-century killing of Armenians by Ottoman Turks “genocide”, coupled with US sanctions on Turkey due to its military acitons in Syria, as its main concern on the agenda
A limited disruption to financial markets and asset prices during Turkey’s military incursion into northern Syria has partially improved, with losses in the foreign exchange market, the interest rates and stock exchange having been mostly recovered.
Although the House’s vote hasn’t had an immediate effect, it will most likely be hanging over the markets like the sword of Damocles for some time to come.
But if we leave political developments aside and take a look at the overall situation of the markets, what can we expect?
Positive signals on the growth front
According to economists, the ability of the Central Bank cutting the rate above expectations and markets showing a limited reaction to this development is a sign that the recent unusually severe period has ended. Turkey enters the final two months of the year with figures showing growth in agriculture, a rapid drop in the interest rate and a partial revival of the property and automobile markets and economists say that the positive effects of the lower interest rate and the inflation rate might be felt in the period ahead.
Experts say that we might encounter a high growth rate, due to the base effect, and stress that a relatively high growth rate can be achieved starting this quarter and lasting until mid-2020. The government’s growth estimate for next year is 5 percent, while the International Monetary Fund (IMF) expects Turkey to grow by 3 percent in 2020. Experts say that growth will be the main issue to pay attention to for the economy.
Positive developments for Turkey
A few other points should be noted which economists deem positively for the Turkish economy. Rate cuts from the “Federal Reserve” and China’s purported willingness to reach a deal with the US, according to statements by US President Donald Trump, will likely have a positive effect on the US economy.
The EU’s recent approval of a three-month extension for Brexit to avoid a no-deal divorce is also a positive development for markets, especially for the Turkish economy, analysts say.
13 November is the date
The most crucial event on schedule, according to experts, is a meeting planned between President Recep Tayyip Erdoğan and US President Trump on 13 November.
This meeting will give hints as to what to expect in US-Turkish relations, which have been extremely rocky recently. International experts note that the meeting might lead to an attempt at normalization of ties, or a complete falling apart.
Markets will most likely be affected by the anticipation about this planned meeting in the first two weeks of November.