Turkey faces economic instability amid democratic and production declines

Recent declines in the Istanbul Stock Exchange have renewed discussions regarding economic instability in Turkey. Analysts identify the core of the crisis as the collapse of both democratic institutions and the production economy. The erosion of the rule of law, judicial independence, and freedom of expression is cited as a primary driver of economic decline, creating a cycle where political instability and economic volatility reinforce one another.

Furthermore, the shift from a major agricultural producer to an import-dependent nation highlights failures in supporting domestic sectors. To combat persistent inflation, experts suggest that Turkey has relied on gradual, delayed measures rather than the decisive shock treatments used successfully by other nations.

Proposed solutions to mitigate the economic burden include shifting the tax burden from indirect taxes, such as VAT and SCT, toward direct taxes on wealth, capital gains, and corporate profits. Additionally, there are calls to eliminate tax exemptions for large corporations, combat the informal economy, and increase transparency and savings within the public sector.