Global investors are abandoning Turkish assets as the lira hits historical lows. Since last May, the currency has fallen 26% against the US dollar in a storm of debilitating fundamentals. The central bank has materially missed inflation targets; the tourism sector has been undercut by terrorist attacks. In theory, the collapsing currency could support growth. But there are limits to that analysis. Turkey’s key export markets include the European Union and Russia. Neither will deliver meaningful growth this year. International travelers are taking greater interest in destinations like Croatia and the United Arab Emirates. Meanwhile, the oil-price dividend has dissipated, while the lira-based cost of internationally-traded commodities is soaring. This week’s central-bank decision to leave its key benchmark rate unchanged may be a death blow to any lingering confidence in the economic outlook. ■
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Image: Resort cities like Bodrum face a dire summer season. Credit: EvrenKalinbacakat at Can Stock Photo Inc.