Turkey is struggling with an economic crisis that threatens to have global repercussions. This situation is the product of both economic and political calculations, with the latter, as usual, exacerbating the former. Turkey's president, Recep Tayyip Erdogan, is playing the nationalist card to respond to the situation, which will make things worse. The question now is whether Turkey's woes can be contained.

Turkey's problems stem from a growth at all costs mentality that paid little attention to soaring current account deficits, stratospheric debt levels and accelerating inflation. The era of low interest rates prompted borrowing with abandon: It is estimated that Turkey's foreign currency debt exceeds 50 percent of gross domestic product, and its current account deficit hit 6 percent of GDP this year. Turkey's corporations are estimated to face a net foreign currency shortfall of more than $210 billion. Inflation tops 15 percent, more than three times the central bank's target. This year, the lira, Turkey's currency, has already lost more than 40 percent of its value against the dollar.

Alarm bells are ringing. Economists have three concerns. First, there is the danger that Turkey cannot pay off its debts and could default. Loans have to be put to productive purposes to get paid off — the swelling current account deficit suggests they have not — and a devalued currency makes paying off foreign loans more difficult still. The yield on Turkish government 10-year bonds exceeded 22 percent last week and five-year credit default swaps — essentially insurance against default — jumped 75 basis points to 453 basis points last Friday, the highest level since March 2009. It is now the most suspect government debt in the world.