What to expect from Erdoğan's third term as Turkey's economic woes worsen
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Erdoğan. Photo: Cemal Yurttas/Dia images via Getty
ANKARA — With a fresh mandate after Sunday's presidential election in hand, Turkish President Recep Tayyip Erdoğan is expected to focus on the country's growing economic crisis and regional challenges amid the ongoing war in Ukraine.
Driving the news: Turkey’s economic outlook appears increasingly vulnerable ahead of Erdoğan's third term. The Turkish lira, meanwhile, hit a new low this week, with Morgan Stanley saying the currency could continue its slide this year faster than expected.
- The country’s central bank reserves dropped into negative territory last week for the first time in 21 years.
What to expect: Attracting foreign investment will be key for Erdoğan, especially as his party seeks to win back control in the Istanbul and Ankara municipalities, which are currently led by the opposition.
- Erdoğan is expected to visit Gulf countries to thank them for their financial support.
- He will also likely continue to forge close ties with Moscow in diplomatic and economic terms, helping Russia bypass Western sanctions and trying to render Turkey more independent from the West.
- At the same time, Erdoğan could unblock Sweden’s access to NATO in return for securing a commitment from Washington for a deal on F-16 fighter jets ahead of NATO’s mid-July summit in Lithuania.
- The issue came up in a Monday phone call between President Biden and Erdoğan. "He still wants to work on something on the F-16s. I told him we wanted a deal with Sweden, so let's get that done. And so we'll be back in touch with one another," Biden told reporters after the call.
Between the lines: The ultranationalist and Islamist parties in Erdoğan's parliamentary coalition are expected to have a lot of influence on policy-making.
State of play: The new Cabinet is expected to be announced this weekend.
- Erdoğan has reportedly held talks with Mehmet Simsek, a former finance minister who enjoys trust in foreign markets, signaling a possible shift in his unorthodox economic policies, including higher interest rates, which the opposition had pledged to reverse.
- Reports also suggest Erdoğan is considering appointing two of his closest confidants — presidential spokesperson Ibrahim Kalin and Hakan Fidan, the head of the Turkish Intelligence Agency — to the new Cabinet.
