As the first trading week of 2024 begins, I think it is useful to take a look at the major risk headlines in the world and Turkey:
- Increase in hot conflicts
- Diplomatic tensions
- Fighting inflation and interest rates
- Local and general elections
- Slowdown in global trade
- Food and energy bottlenecks
- Natural disasters
- A new pandemic
Other items could certainly be added, but it is possible to summarize the global and national developments that will affect Turkey with these. Let us now take a brief look at the items:
The escalation of hot conflicts, tensions with the US and the EU, Sweden’s membership and the F-16 issue, especially before the 75th anniversary of NATO on April 4, seem to be the most important agenda items for the Turkish government. On the other hand, rising inflation, rising interest rates and the slowing economy ahead of the local elections will also be critical topics. There may be a fraction here. Frankly, I believe that even if Sweden’s membership is passed by the Parliament, there will be a blockage on the F-16 issue, and I attribute a similar risk to a change in the economic management.
I believe that the local elections will take place in a very harsh atmosphere. The competition in big cities will lead to a hardening of political discourse. The position of the Presidential Palace this week on the football match fiasco in Saudi Arabia is very important. The government will not want to antagonize the supporters of the two clubs, and if it does so, other communities may turn against it. We will witness a bombardment of messages in which criticism will focus more on those who fueled the incident than on the parties involved. But it is clear that the government is in a difficult situation and someone will be blamed for this. There will be around 70 local and general elections in the world, including our local elections. So we will see similar harsh rhetoric and tension everywhere.
The US, China and Germany are likely to face growth problems in 2024. This slowdown in the powerful actors of global trade will naturally have an impact on international economic relations. Problems in the US and Germany, to which Turkey exports the most, will have an impact on the foreign trade deficit and the current account deficit, and ultimately on exchange rates. Energy security may become an issue even in slowing economies, as countries start to become food nationalists in order to become self-sufficient. Of course, these developments will not have a positive impact on inflation.
We know that we are not adequately prepared for the Istanbul earthquake and that there are serious coordination problems, which we realized with last year’s earthquake. For this reason, we can say that the biggest risk of 2024 is the Istanbul Earthquake, which we cannot predict exactly when it will happen. If it happens right at the beginning of the year, we will spend the next 5 years, including this year, recovering. In addition, it would not be wrong to say that neither the Finance, the Treasury nor the Central Bank is ready for a disaster of this level. It will happen one day, but we have no choice but to pray that it will not happen this year.
We are all aware that the pandemic has changed shape. It doesn’t kill anymore, but it is putting people out of work. There are strains of flu that are constantly changing their shape and resisting medication. Not only cough and cold, but also nausea and severe headaches, muscle aches and pains, and we are faced with variants that put people in bed. Doctors are now frustrated too, saying “you’re fine”, prescribing medication or antibiotics and sending patients home. Meanwhile, cases of sudden death have increased. There are scientists who say that some of these are due to vaccines against COVID-19. So, if there is another pandemic, the number of people who do not want to be vaccinated will increase. They will prefer to stay at home and not come to work in the face of the rules. Saying “Let them stay home” is not a solution, but it is necessary to work on some scenarios now in order not to lose qualified human resources.