Published On: Sat, Apr 28th, 2018

Signals sent by Turkey’s economy and business world as snap elections approach

Economic signals sent by Turkey’s economy as snap elections approach

President Erdoğan, meeting –

is a couple of steps away from the most vital elections in its history on 25 June 2018. Citizens – who have voted yes for the presidential system earlier – will choose the PRESIDENT as well as the new parliament with 600 deputies. No doubt Turkey is going to witness a very tough challenge between ERDOGAN, the current president and the opposition front formed by CHP (People’s Republican Party), İYİ Party (established by Meral AKSENER) and SAADET Party (Felicity Party) on top of pro-Kurdish HDP (People’s Democratic Party) also rivals to governing AK Party.

The very interesting point is, at a time when AK Parti officials (President in the first place) repeatedly stated early elections were not even in question, all of a sudden President ERDOGAN declared elections to be held on 24 June, that is within such a short time like 60 days. This is actually quite saddening as the President had stated several times earlier that “requesting an early election would be treason” –  in reply to comments “an early election was on the horizon”. The ruling party (Erdogan) also stated there were several reasons for such a change (a drastic one certainly) in plans to include the challenges imposed by the economy and political risks in the Middle East (and the world).

At the end of the day the snap elections are approaching very fast and the citizens should be ready to witness major measures to be introduced by the winner of the elections (regardless who the winner is) and the economic difficulties to follow. For instance “devaluation” of the Turkish Lira and additional taxes to come could be among these measures which would make life real tough for ordinary citizen in the street. Some experts say one of the main reasons for such inevitable steps to be taken after the election, is that Turkey needs to find USD 215 billion to cover its external debts and current account deficit, until the end of 2018 only. Needless to say such action would have a substantial negative impact on inflation and cost of living to hurt ordinary citizens trying to make ends meet each month.

On the other hand, to give an idea about the unpleasant situation of the business world, even the construction sector which has always been the locomotive of Turkey’s economy is observed to be facing the risk of an eventual recession. In fact, some major groups such as ULKER and DOGUŞ (also in the construction sector) have had to sit at the table with banks to restructure their debts.

The bottom line is Turks will have to work harder and endure more difficulties in the coming months regardless who the winner of the elections is; Whether it be the ruling AK Party or the opposition led by CHP and its leader Kemal KILICDAROGLU.

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