Livin' La Vida Loca
We stick to the macro scenarios we’ve introduced in earlier reports but tweak the odds a little – for the worse, on the back of the adverse shock inflicted by the Russian invasion of Ukraine. To recall, we surmised that three macroeconomic scenarios could play out between now and the elections, broadly speaking, which we’ve dubbed “the good, the bad and the ugly” from Ankara’s perspective.
In the good-case scenario, which we think is extremely unlikely at this point, Ankara enters elections with a stronger economy, lesser poverty as well as a markedly lower inflation. The other two scenarios – both fairly unpleasant from a political and social perspective -- alternate between a stagflationary one, and another that entails a crisis of sorts with a severe market turbulence, say, of the December 2021 variety.
Now read on...
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