(MENAFN- Asia Times)
Credit-fueled growth in consumption is driving the current account deficit to an unsustainable 5% of GDP, the Swiss bank argued in a report today, adding that the Turkish lira's tailspin of the past month is likely to continue.
The Turkish currency traded at an all-time record low against the Euro, and close to a record low against the US dollar. Among its concerns about the Turkish economy and stock market, UBS cited high corporate leverage, high dependence on short-term borrowings by banks, and "waning relations with key trading partners."
The Gulf states have been a major source of financing for Turkey through the short-term interbank lending market, but Turkey's turn towards Iran and its backing for the Muslim Brotherhood are a major irritant for Saudi Arabia. It may not be coincidence that the Turkish currency nose-dived a week before Crown Prince Mohammed bin Salman consolidated power and froze hundreds of billions of dollars of royal family assets.
Must-reads from across Asia - directly to your inbox Comments
Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.