Postdating a cheque
In addition, privately funded infrastructure projects, in partnership with the Turkish state, in transport (Istanbul New Airport), energy (TANAP Project) and health, may drive growth.
The new law on cheques, in force since December 2009, focuses on protection of the rights of cheque holders (beneficiaries) and institutes three categories of cheques – cheques for business users, cheques for consumers, and pre-printed bearer cheques – to facilitate tracking this payment instrument and to combat the underground economy.
In addition, private consumption should be boosted by consumer confidence, which has improved significantly since the beginning of the year.
However, its growth is expected to be capped by lower wage dynamics, the high unemployment rate (13% in January, the highest rate in seven years) and inflation, which is expected to increase significantly due to the depreciation of the lira, higher prices in energy, food, clothing and transportation.
Although the reaction of the markets has been rather positive, the possibility of early elections weighs on domestic and foreign investment intentions.
Breaches to the rule of law, the ambiguous and uncertain relationship between Turkey and the EU, tensions in the south-east of the country, military operations in neighbouring countries and anticipated changes in the US monetary policy are likely to weigh on the economy.