Turkey is facing difficulties due to the familiar underlying issue

Turkey’s Economic Challenges: A Closer Look

Turkey’s top policymakers have been actively engaging with officials in Washington, emphasizing that the central bank’s significant recent reserve declines are a result of the conflict with Iran, rather than domestic issues. However, this explanation does not reflect the reality. The root cause lies in Turkey’s persistent focus on rapid economic expansion, which repeatedly drives the country’s current account deficit to unsustainable highs.

This pattern is evident when examining the current account figures from the first two months of this year—well before the onset of the war. During this period, the deficit was larger than in any year except for 2023, highlighting the ongoing structural challenges.