Circumstances not quite suitable for reforms

The new government has submitted the temporary budget to parliament. It is also making the last preparations on the reforms. Statements are expected in a couple of days. 

Deputy Prime Minister Mehmet ?im?ek said the fiscal discipline anchor would continue and EU and reform anchors would be added on top of it. Consequently, an expectation has formed that the reform program and economic measures included in them will be radical measures. We will have the opportunity to see, through these statements, the government's vision, particularly for the economy for the new term. However, for the implementation of an ambitious reform program, we have to say that there are serious difficulties in terms of suitable domestic and external circumstances.  

With the effect of the latest employment data, global markets are quite sure the U.S. Fed will hike rates in mid-December. For this reason, abstention is strengthening toward emerging countries like Turkey. At this point, some analysts state that after the Fed's rate hike, the situation will be tough emerging countries because of capital outflow. Some other analysts, though, estimate that after a short while an inflow to those countries will restart. We will have an opportunity to test which one is true soon but it is almost certain that when the Fed's rate hikes starts, a strong reaction will occur. 

After this stage is overcome, capital will obviously be much more selective. In other words, distinctions among emerging countries will be inevitable. In this process the steps the countries take and the domestic and external circumstances they have will be influential in attracting capital. 

Economic preferences 

At this stage, it seems probable Turkey will undergo some difficulties....