Bloomberg this week reported that the open political warfare rocking Turkey, which has pitted the ruling Justice and Development Party (AKP) against followers of U.S.-based cleric Fethullah Gulen, is endangering the country’s economy.

The mounting power struggle between Turkish Prime Minister Recep Tayyip Erdogan and the judiciary is turning the country’s stock market into the world’s worst performer and driving the currency to unprecedented lows. The Borsa Istanbul 100 Index (XU100) has slumped 15 percent in dollar terms this month, the most among more than 90 benchmark gauges tracked by Bloomberg. The measure extended this year’s slide to 27 percent, as a corruption probe embroiled Erdogan’s cabinet and led to three ministerial resignations. Turkey’s lira has sunk 4.9 percent in December, second only to Argentina’s peso among emerging-market currencies, and traded at a record low of 2.1764 per dollar last week.

The outlet evaluated that the crisis, which it assessed threatens to reverse nearly a decade of economic progress made by Turkey, is at risk of becoming a downward spiral of tit-for-tat moves by the two rival Islamist camps. Gulen-influenced prosecutors have been pursuing and widening a corruption probe that has already ensnared top AKP elites, and those elites – up to and including Turkish Prime Minister Recep Tayyip Erdogan – have responded by seeking to purge the judiciary of Gulenists. Turkish media reported earlier this week that the battle was “entering a new phase,” per an announcement by deputy prime minister Bulent Arınc that the government was developing a plan to “do whatever necessary – legal or judicial – against” opponents in the judiciary.

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