The ongoing US-Israeli conflict with Iran is exerting significant pressure on Turkey's economy, complicating an already challenging financial landscape The primary impacts include a notable outflow of foreign investors seeking safer assets, a widening of the country's current account deficit, and persistent inflation that was on an unfavorable path even before the conflict escalated This confluence of factors poses a strategic challenge for Ankara, testing its economic resilience amid heightened regional instability.
The economic fallout is compounded by Turkey's structural vulnerability to fluctuations in global energy prices, an acute concern during a conflict-driven oil shock. As a major regional power navigating complex diplomatic ties with all parties involved, the economic strain could have broader geopolitical implications for Turkey's foreign policy and its role in the region.
In an effort to manage the crisis, Turkish authorities have deployed several fiscal and monetary tools. Ankara's response has included freezing its cycle of interest rate cuts to support the currency, making direct cash injections into the markets to ensure liquidity, and relieving taxes on fuel to ease the burden on consumers These measures are aimed at cushioning the domestic economy from the immediate shocks of the regional war and reassuring international markets
Mohsin Rana
