Why Turkish savings need to rise

The fall in the lira and the sharp rise in bond yields over the past month have cast the spotlight back onto Turkey’s persistent current account deficit and dependency on foreign capital inflows. At the root of this problem lies the country’s low domestic savings rate. Enacting policies to raise savings will be challenging, particularly against the backdrop of the recent political unrest. But arguably the prospects for reforms are better in Turkey than in the likes of Brazil and Russia.