ISIS and oil prices: Turkey's economy after the 'fragile five'

Falling oil prices have given Turkey's economy a boost, even as the Islamic State conflict edges closer to its borders. Julian Mayo from Charlemagne Capital takes a look at Turkey's fortunes.

In the middle of last year, Turkey was included in the list of ‘fragile five' economies pressured by the lethal combination of a current account deficit and a high budget deficit. Markets took fright as the US signalled the end of quantitative easing, expecting a slowing in the flow of liquidity from the US would hurt the fragile five. The Turkish lira fell 20% in the space of eight months and stocks slumped. Domestic consumption came off the boil, and the imbalances started to narrow. Since then, Turkey's current account deficit has fallen from 8% of GDP to 6% this year and, until th...