Goldilocks global growth, mixed on country stories

Tim Ash, senior strategist, Blue Ray Asset Management

Dünya Executive - - REPORT -

Global growth data is still telling a story of a synchronis­ed global recovery, perhaps led by Chinese reflation from mid-2015, but coming in parallel with a pretty sustained U.S. recovery now as balance-sheet healing in U.S.A. Inc. appears pretty complete and, now being joined by newfound confidence in Europe, perhaps helped by recent political gains for more mainstream forces. In Turkey, the strong growth and reform story seemed to go off the tracks in 2013, and President Recep Tayyip Erdogan has struggled to bring things back as he has faced an increasing­ly difficult domestic, foreign-affairs and security setting. Arguably he has not helped matters by his own often unorthodox economic-policy impulses – against an “interest-rate lobby” and reining in the independen­ce of the Central Bank – and also by playing the nationalis­t card to the detriment of relations with the European Union and traditiona­l allies in the West. Turkey has some well-known vulnerabil­ities the wide current- account deficit and a large externalfi­nancing requiremen­t – but also key strengths, including robust public finances, strong banks and favorable demographi­cs. But Erdogan needs to go back to the successful pro-business policies of his party in the 2002 to 2013 period, if he is going to win the 2019 elections. (May 25)

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