Country Risk Profile
Turkey
Macroeconomic Stabilisation vs Geopolitical Multi-Alignment
Turkey (Middle East) — NATO pivot, currency stress and neo-Ottoman ambition. KJ currently rates Turkey's overall geopolitical risk as Elevated (58/100).
Overall risk
ElevatedExecutive summary
Turkey is currently navigating a precarious transition from unorthodox monetary policies to fiscal orthodoxy while leveraging its unique geographic position to act as a bridge between the Global South and the West. While systemic risks to the banking sector have receded, high inflation and regional instability continue to weigh on the investment climate. President Erdoğan remains the central arbiter of power, maintaining a delicate balance between NATO commitments and pragmatic ties with Russia and China.
Key risks
- Persistent triple-digit or high double-digit inflation eroding purchasing power.
- Sudden shifts in foreign policy causing friction with Western capital markets.
- Potential military escalation in Northern Syria or the South Caucasus.
- Vulnerability to global energy price shocks due to import dependency.
- Credit risk associated with high external debt obligations in the private sector.
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Scenarios & strategic implications
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KJ analysis on Turkey
- The Anadolu Corridor: Turkey’s Search for Strategic Autonomy
Ankara is systematically dismantling the post-Cold War security architecture. By leveraging low-cost drone technology and a non-aligned forward basing strategy, Turkey has transformed from a NATO flank state into an independent polar power in the Middle East.
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- Turkey announces imminent Syria military operation: Is the threat real?
- Why is Turkey blocking Sweden and Finland from joining NATO?