Turkey's economy face-to-face new crisis

"This currency flow abroad from Turkey is not on balance as this money is that which was borrowed. It is risky. If the foreign debts are directed to investment, it won't be risky. But, the current situation is risky for Turkey," head of Finance Department of Istanbul University, Professor Esfender Korkmaz told APA's Turkey bureau.

He believes that the economy of a state must decline if the foreign debt service payment comes up to its GDP.

"That is why it is risky to determine the current deficit with foreign debt. The budget deficit can be filled with foreign debt for 3-5 years but the price fluctuation in Turkey's market in May-June showed that this process may last more. Because the foreigners are on alert to take the capital away from the country in this situation."

He thinks that the Turkish currency Lira is not expected to cheapen. "If the exchange rate of the USD had remained at 1.7-1.8/lire after the price fluctuation in May-June, it wouldn't be risky. But the investment flow to the country re-increased the interest rate. Increasing budget deficit impedes elimination of risks. That is why Turkey's economy can face a new crisis."