The Turkish economy has registered a 1.8% slump for the 3rd quarter of last year, and the forecasts are even grimmer for the last quarter. And all of this, after a decade-long growth. Question is, would Erdogan and his almost one-party state have survived politically in the conditions of an impending economic crisis? Very unlikely - if Turkey still had a democracy.
However, the ruling regime has done their best to crush any dissent in recent months, and find new enemies (internal and external) that they could focus people's discontent upon. In the meantime though, the two major rating agencies S&P and Moody's have remained unimpressed, and have downgraded the Turkish debt below the acceptable levels, now placing it at "Junk".
Turkey is maintaining dangerously big deficits. But that's not even their biggest problem right now - after the 2009 crisis, they've got a fiscal problem as well. The foreign debt of their foreign sector has swollen to $ 180 bn, while their assets remain around 50 bn. While domestic consumption remains the main driving engine for the Turkish economy (roughly 70% of the GDP), and the constant influx of Syrian refugees is actually having a positive on that sort of economic model, bringing positive effects to the economy, the expenses of the Turkish households have increased by nearly 5% for last year.
The short period of Russian sanctions might've also had a short-lived positive effect, as they calmed down inflation and the food prices. The problem is, Turkey has consistently relied on foreign investment to generate prosperity throughout the years, and now that factor for economic and income growth is gone. Pay time seems to have finally arrived for the Turks.
Things are changing in a bad direction for Turkey: inflation reached 9.22% in January, the population is getting poorer, and prices are steadily climbing all across the board. Interest rates remain high. And the constant terror threat is hindering tourism, which (thanks to the weaker national currency, the Lira) could've been a stabilising factor against economic crisis.
Erdogan is trying some desperate measures. For example, the Turkish central bank is considering giving local companies the chance to pay their debts in Russian Roubles, hoping for an influx of fresh capitals from Russia. But the Russian financial system is also in a bad shape because of the devaluation of the Rouble and the Western sanctions. So there isn't much help to be expected from that direction.
In these conditions, terrorism, creeping Islamisation, and the authoritarian rule of the country are threatening to change Turkey in ways that would hurt it very badly in the long run. Given the fact that the Turks are very proud and politically sensitive people, and until recently they used to boast of a vibrant, flourishing economy, they're not very likely to forgive this to their rulers. Sooner or later the first political cracks will start appearing.