Silent Cry of Turkish Industry: Financing Crunch and Deindustrialization Risk

Turkey's industrial backbone is being pushed toward a deepening cash flow crisis due to chronic difficulties in accessing finance and a sharp slowdown in domestic demand, with a warning of "deindustrialization" from Coface economist Seltem İyigün serving as a critical risk alarm regarding the economy's structural resilience.

Financing Bottlenecks and the Silent Crisis in the Real Economy

The disruption of cash flows, the lifeblood of the real sector, threatens not only working capital issues but also the future of production capacity. According to assessments aired on Nasıl Bir Ekonomi TV, liquidity tightness in the market is forcing industrialists into difficult strategic decisions.

■Coface economist Seltem İyigün stated that industrialists are facing a severe liquidity trap as financing costs become inaccessible.

■The marked slowdown in domestic demand was highlighted as suppressing capacity utilization rates, pressuring profitability, and disrupting cash cycles.

■The current picture is described as evolving beyond short-term cash management problems into a structural issue that erodes the sector's appetite for investment.

Structural Threats to Growth Composition

The decline of the industry, the engine of economic growth, within the total growth composition is defined as a threat element for sustainable development in the long run. The process of deindustrialization creates an effect that reduces the economy's resilience against external shocks.

■The decrease in industry's share within Gross Domestic Product (GDP) paves the way for weakening economic resistance and increasing current account deficit pressures.

■Warnings suggest that risks are escalating toward a growth model dependent on demand and imports rather than production-oriented growth.

■İyigün cautioned that should financing difficulties persist, production lines could come to a halt, triggering socio-economic costs that will reflect on the labor market.

Cash flow crises harbour a structural risk that threatens not only corporate balance sheets but also tax collection forecasts and consequently the budget balance. The loss of industry's function as a growth engine is a signal of a departure from value-added production, and this necessitates the redesign of employment incentives in terms of fiscal policies.