Erdoğan's election failure dashes reform hopes - Reuters
International investors fear Turkish President Recep Tayyip Erdoğan is unlikely to adopt risky reforms to support Turkey’s troubled economy following his party’s weak showing in local elections, Reuters reported on Monday.
Berat Albayrak, Erdoğan's son-in-law and Turkey’s Finance and Treasury Minister, is expected on Wednesday to announce structural reforms to restore the country's economy hit hard by high inflation and a depreciated currency.
"Many analysts are sceptical about the chances for a comprehensive reform plan, especially after the elections, and fear the (ruling Justice and Development Party) AKP will opt instead for short-term stimulus measures that fail to tackle, and may even exacerbate, deeper weaknesses," Reuters said.
“I would not expect concrete reforms, it will be just words,” Guillaume Tresca, senior emerging markets strategist at Credit Agricole, told Reuters.
Ahead of March 31 local elections, the government started selling cheap fruit and vegetables in city squares in an effort to help slow headline inflation and required banks to cut lira funding to a London foreign-exchange market and utilised central bank reserves.
“It looks like the Erdoğan instinct is to survive,” said former Turkish central bank governor Nihat Bülent Gültekin. “I don’t think they have any long-term objectives. It would require a constant focus on the economy for an extended period of time.”