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Syria conflict impacts on Turkish economy

Turkey's central bank has cut its overnight lending rate for the second consecutive month in an attempt to revive a slowing economy which analysts fear are suffering from regional unrest and above all the conflict in nearby Syria. Turkey's economy grew 8.5 percent last year, but the government has trimmed growth forecasts to 3.2 percent for 2012 as the inflation rate hikes and domestic demand weakens. Jobs in Turkey are also under threat - the unemployment rate also rose to 8.4 percent in September, up from eight percent a month earlier, knocking consumer confidence to the lowest level seen over the past two years. Even Turkey's robust tourism industry has been affected, with the number of incoming tourists dropping by some two million this year, according to the country's Ministry of Tourism. Murat Sangman, Notus Asset Management: "We have a lot of uncertainty, not only in Turkey, but also in the world. (Like) the election in (the) US is coming [on] Nov. 6. And we have also the geopolitical (concerns) (it) could be Israel, Iran, (and) a lot of problems that are not solved yet. (That's) why it will all affect the economy for Turkey." Turkey's political and economic links to the Arab world have been undermined by the ongoing crisis in Syria, exacerbated by cross-border exchanges of fire. As the Syrian conflict continues to spill over into neighbouring countries, including Turkey, Ankara will be hoping its country's economy is not further dragged into the fracas.
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