Turkish economy may collapse in a year or two, expert warns

PanARMENIAN.Net - The Turkish economy may collapse in a couple of years if politicians do not show the West that the economy is trustworthy, Daron Acemoglu, Professor at the Massachusetts Institute of Technology (MIT), said according to Hürriyet Daily News.

“Economic growth comes from consumption and consumption is encouraged by loans. This is not sustainable. We have very little time left. There might be a crisis,” Acemoglu said.

“This may occur in the next one or two years,” he added

The election of Donald Trump as the president of the United States is speculated to cause foreign capital outflow from Turkey, Acemoglu warned.

"If the interest rates rise in the U.S., which is expected in Trump’s administration, the withdrawal of capital will accelerate. We have to get our act together before this happens,” he said.

Acemoglu added that economic development is highly correlated to press freedom.

“For a long-term development, transparency, openness, comprehensiveness and competitiveness are crucial. It is very hard to provide that in places where there is no press freedom. Then, the risk of monopolization, corruption of the judicial system, and the emergence of dictatorship escalates,” he said.