Moody's said that a "world of pain" awaits the Turkish economy in the coming year, especially after the Turkish lira recorded its worst performance this year.
According to Bloomberg, the lira declines this year will translate into severe economic problems as growth slows in developed and emerging markets.
Moody's expects the Turkish economy to shrink in the first half of next year as lira prices fall and borrowing costs rise. "Inflation and the sharp rise in borrowing costs are likely to affect household purchasing power, private consumption and investment," she said.
The forecasts come as the International Monetary Fund (IMF) said Turkey's economic growth could fall to 0.4 percent in 2019, from 3.5 percent this year.
"A weak pound and rising borrowing costs will have an impact on investment and consumption," the IMF said in a report released Thursday.
August 10 marked the lira's peak this year, with the process down by 18 per cent during trading, while it had lost almost 40 per cent since the beginning of the year.
