​​​​​​Despite improvement in Turkey’s economy in 2019 following a devastating year prospects for 2020 are mixed with growing concerns over central bank independence and high debt levels, wrote Global Capital.

Considering the country’s currency crisis just one year ago and the shadow cast by U.S. sanctions threats, Turkey enjoyed a sensational year of borrowing, it said.

Turkey was hit by a currency crisis hit in the summer of 2018, knocking nearly 30 percent off the lira’s value against the dollar by the year’s end. However, the country merged from a painful economic recession – defined as two successive quarterly contractions -- in the first three months of this year.

However recovery has been slow, prompting the central bank to slash interest rates and the government to dip into the coffers of state-run banks to dish out cheap loans to consumers and businesses.

The first quarter of the year was Turkey’s busiest ever in the bond market, with Turkish borrowers printing around $10.6 billion of international issuance, equal to the whole amount raised in 2018 and the lion’s share of the $16 billion raised this year, the article said.

Turkey’s the combined total borrowing is remarkably healthy given Turkey’s geopolitical and economic troubles, it added.

The Global Capital article cautioned however that good times might not be around for too long.

“Turkey has a high external financing requirement, which it’s been able to finance this year,” it quoted Paul Greer, senior EM portfolio manager at Fidelity in London, as saying. “But then, it was a very benign year for EM.”

The country’s fiscal picture looks bleak despite the country’s inflation, which has collapsed from 25 percent to 8.5 percent and the current account deficit from 7 percent of GDP to almost flat, the article underlined.

“The sheer volume of corporate debt is a serious problem,” the article quoted James Athey, a senior investment manager at Aberdeen Standard Investments, as saying.

Bad loans in Turkey have almost doubled since a currency crisis last year. Credits in foreign currency, which have become more expensive to repay, make up about 40 percent of the banking industry’s total assets.

The lack of central bank independence remains a cause for concern in Turkey particularly following Erdoğan’s firing of in July of governor Murat C,Çetinkaya for refusing the president’s demand for a cut to interest rates.

The bank has slashed its benchmark interest rate for the fourth time this year in a bid to kick-start lending.

“I think they cut too much too quickly, and that the direction of inflation is going to reverse as a result,” Athey said.

Another problem looming over Turkey’s economy is the threat of U.S. sanctions over its purchase of the Russian S-400 missile system, it said.

U.S. lawmakers earlier this week moved forward on two pieces of legislation this week that would punish Turkey for purchasing the systems from Russia.