Turkey has established itself as a key geopolitical player, but also as an economy undergoing a dramatic shift in direction. Lucía Bonet, Country Risk Analyst at Cesce, has analyzed the country's current situation, highlighting the "return to orthodoxy" initiated after last year's elections.
“We at CESCE view this return very positively,” Bonet stated. The key to this new strategy is the application of “a tight monetary policy with the very aggressive increases in interest rates."
According to the analyst, this strategy is already yielding tangible results. "It is helping to correct imbalances," she noted, both on the front of inflation such as "supporting the recovery of reserves." Overall, this policy is "improving the country's solvency position," a factor that Cesce considers "extremely beneficial" for the country's risk rating and which, ultimately, "reduces the commercial risk that companies perceive in the Turkish environment."
Political risk and geopolitical balance
Despite the economic improvement, Bonet stressed that "the main risk facing the country is political." Specifically, he referred to the risk "of a reversal of orthodox monetary and fiscal policies."
The Cesce analyst identified the trigger for this possible reversal: "This regression (...) could only occur if (...) Erdogan needed to increase his popular support"or in the event of new elections. However, he clarified that "given the prospect of no elections being held in the short term, we believe that orthodox economic policy will be maintained."
Bonet also stressed the need to differentiate between the economic and geopolitical spheres, where Turkey plays the role of an "indispensable partner." He emphasized that the country is one of the "greatest beneficiaries" of the new international context. multipolar.
"Apply a middle-power diplomacy "This allows it to gain autonomy in both defense and energy decisions," he explained, while remaining selectively aligned with the United States and the European Union, which reinforces its position as a "key player in the Middle East context."
An "attractive" destination for the Spanish company
According to Bonet, Cesce's analysis focuses not only on specific indicators but also on the "structural situation." He concluded that, despite vulnerabilities, macroeconomic indicators "underpin the country's external solvency."
Following the crisis, Bonet stated that Türkiye "has become in recent years (...) a an extremely attractive destination for Spanish companiesThe reasons are clear: "a highly diversified production structure" and "very high opportunities for commercial development between Spain and Türkiye."
Therefore, he sent a message to the business community: "We at Cesce are very open to receiving proposals for certain operations and being able to..." to help Spanish companies in that internationalization operation into the Turkish market."