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Local manufacturing is important for currency management in Turkey

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The current currency crisis in Turkey has led many citizens to demonstrate against the AK Party government over the past couple of days. Before analysing the crisis, it is important to highlight Turkey's economic and social development performance since the early 2000s.

According to the World Bank's "Country Partnership Strategy 2018-2021" report, Turkey developed its economy rapidly and opened up to foreign trade and finance during this period by implementing regulations corresponding with European Union (EU) standards. The report confirmed that it also recovered well from the global financial crisis of 2008/09.

It is not a coincidence, therefore, that the bank also acknowledged that this economic improvement has been impressive, leading to increased employment and income, and making Turkey an "upper-middle-income country". What does that mean? The World Bank says that lower-middle-income countries have to reach per capita Gross National Income (GNIs) between $1,036 and $4,045, while upper-middle-income economies should be between $3,046 and $12,535. That's why Turkey is in the latter category with GDP per capita of around $8,610.03 in 2020.

If that was the case last year, why has its currency collapsed so dramatically........

© Middle East Monitor

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