Mubasher: Turkey’s economy is going through a state of overheating, economists stated this week, warning that the government’s failure to act would lead the country through “slow burning crisis.”

The Turkish lira hit a record low against the US dollar to 4.4527 liras on Tuesday, driven by the Turkish President Recep Erdogan’s pledge to lower the interest rates after the upcoming June early elections, a monetary policy which priotorises growth over curbing inflation.

Erdogan unusually decides his country’s monetary policy, while reportedly limiting the powers of the Central Bank of the Republic of Turkey's (TCMB), which raised interest rates for the first time in late April, leading to a temporary rise of the lira.

Meanwhile, Turkey saw a current account deficit in March reaching $4.812 billion, compared to $4.5 billion in the previous month, while the deficit was more than 60% in February year on year.

"Turkish growth is unbalanced, inflation high rising, foreign debt costs ballooning and domestic FX expectations unmoored," TS Lombard global political research analyst Marcus Chevenix warning that “downward pressure on Turkish assets will be back very soon."

If Erdogan and his party won in the early presidential and parliamentary elections in June, previously slated for November 2019, he would draw on his popularity to mitigate the consequences of worsening economy.