What awaits Türkiye's economy after Erdogan's success?

Turkish President Recep Tayyip Erdogan won the presidential election run-off to secure another five-year term.

  According to official preliminary findings that put an end to determined opposition efforts to overthrow his country's longtime leader. The semi-final results showed him beating his secular rival Kemal Kilicdaroglu by four percentage points.

On Sunday evening, the head of Turkey's High Electoral Commission, Ahmet Yener, said Erdogan won 52.14 percent, after 99.43 percent of the votes were counted. he added that Kilicdaroglu, Erdogan's rival, won 47.86 percent of the vote.

Kilicdaroglu won 44.9 percent of the vote in the first round to Erdogan's 49.5 percent, reflecting strong support for the president despite the worsening cost of living crisis and pre-election polls showing Kilicdaroglu ahead.

Celebrations across Türkiye

Celebrations spread across Turkey as world leaders followed, with Erdogan giving his first speech from the roof of a bus in Istanbul.

"Our nation has entrusted us with the responsibility of ruling the country for the next five years," he told a crowd of supporters outside his residence in the city.

Erdogan, who ruled Turkey for twenty years, added, "We will fulfill all the promises we made to the people," stressing that "every electoral process is a renaissance."

In a second speech from the presidential palace in Ankara to hundreds of thousands of his supporters, Erdogan called on Turks to "unite in solidarity".

Recep Tayyip Erdogan enjoys broad support among the poorest and most rural segments of Turkish society for his promotion of religious freedom and the modernization of once-crumbling cities.

On May 14, he managed to reach the second round for the first time in the history of the presidential elections in Turkey.

The vote came amid Turkey's worst economic crisis in two decades and after devastating earthquakes in the east of the country in February.

The Turkish lira fell

The Turkish lira fell to 20.05 against the dollar, with Erdogan declaring victory. This number is very close to a record low of 20.06, which the lira recorded against the dollar on Friday.

The daily movements of the lira have become abnormally small and are mostly heading in one direction: downward.

Deposit protection

Exporters are now forced to sell 40 percent of foreign exchange earnings to the central bank, while the scheme to protect bank deposits from exchange rate swings, which helped quell unrest in 2021, remains a crucial but potentially costly wall of defence.

What awaits Türkiye after the elections

The deteriorating economic situation is one of the most important domestic challenges that the next Turkish president must quickly deal with.

The Turkish economy is going through a critical phase, as the inflation rate has officially reached around 44 percent, but many are skeptical about this rate and say that the rate is much higher.

Food prices have gone up

Food prices rose 54 percent year-on-year in April, with inflation finally declining after peaking in October at 85.5 percent, the highest level under Erdogan.

Annual inflation has remained above 10% for nearly five years since the 2018 elections. However, it began to rise sharply after the currency crisis in late 2021, which, according to analysts, was caused by a series of interest rate cuts as part of Erdogan's policy. non-traditional economics.

Model for economic growth

Erdogan's early years were a model of strong economic growth and massive construction projects, and Turkey has always adhered to the terms of loan agreements with the International Monetary Fund.

However, the Turkish lira lost 44 percent of its value in 2021 and 30 percent in 2022, due to Erdogan's monetary policies, the Ukraine war, and disagreements with Washington.

In an effort to attract voters amid the dire economic situation, especially the youth, Erdogan promised to create six million jobs, achieve high growth rates, and give a big boost to tourism.

Erdogan, who has tripled the minimum wage in one year, made more generous campaign promises, including scholarships for students who lost relatives in the earthquake.

Syrian refugee 

With regard to external challenges, the Syrian refugee issue is one of the most prominent external challenges that come at the top of the priorities of the next Turkish president, and among the three main issues of concern to the Turkish voter.

According to UNHCR, some 3.7 million Syrian refugees who came to the country after the outbreak of the Syrian conflict in 2011 live in Turkiye.

Analysts now hope that Erdogan, who secured victory on Sunday, will deliver on his campaign promises to boost incomes and rebuild the country after the February quake.

Some investors worry that if the market recovers again, authorities could resort to more stringent capital controls, something the government has repeatedly said it is not considering as it seeks to close the $230 billion external financing gap or 25 percent of the country’s gross domestic product.