Skip to content Skip to Search
Skip navigation

Erdoğan election blow poses questions for Turkey’s economy

Supporters of Ekrem İmamoğlu, Istanbul's CHP mayor, celebrate his re-election on March 31 Reuters/Umit Bektas
Supporters of Ekrem İmamoğlu, Istanbul's CHP mayor, celebrate his re-election on March 31
  • Opposition tops municipal poll
  • CHP now controls 5 major cities
  • ‘High cost of living’ swayed voters

Turkey’s opposition has dealt the ruling bloc of President Recep Tayyip Erdoğan a resounding blow in municipal elections – a result that could have a significant impact on the country’s economy.

The Republican People’s Party (CHP) won more than 38 percent of the popular vote on March 31, compared to 36 percent for Erdoğan’s Justice and Development Party (AKP).

The CHP now controls Tukey’s five largest cities – Istanbul, Ankara, Izmir, Antalya and Bursa – along with dozens of other municipalities across the country. 

Between them, the five cities account for more than a third of Turkey’s population of 85 million people and 60 percent of the country’s GDP. Istanbul alone accounts for 16 million and 30 percent of those totals, so the elections have given the CHP a significant say in the economic life of the nation. 

It is the party’s highest vote share in a local election in three decades, easily surpassing the 25 percent it garnered in last year’s parliamentary election

Turkey’s markets reacted cautiously to the outcome on Monday, with the main index on the Istanbul Stock Exchange down 1.7 percent in slow trading. The lira continued to edge down, taking its losses to more than 8 percent so far in 2024. 

Hours after the polls closed, Turkey’s finance minister, Mehmet Şimşek, said the government’s austerity programme would continue. The strategy aims to rein in inflation, which topped 67 percent in February. 

Key to this rebalancing has been curbing consumer spending, with the central bank raising its key lending rate from 8.5 percent in June 2023 to 50 percent in March.

Although there had been some speculation that President Erdoğan might pivot to more populist policies, such as lower interest rates and higher wages and pensions, to woo voters, economist Mustafa Sönmez said the government was likely to stay the course on its austerity programme at least until mid-2025. 

President Recep Tayyip Erdoğan poses with supporters on March 31. He is expected to 'stick with' his finance minister and economic programme despite the resultMurat Kulu/PPO via Reuters
President Recep Tayyip Erdoğan poses with his supporters on March 31. He is expected to ‘stick with’ his finance minister and economic programme despite the election result

“The dominant factor in the election result was the high cost of living,” Sönmez told AGBI.

“However, Erdogan knows he has four years without elections, so he will stick with Şimşek and the current economic programme.”

“There will be a cost because you can’t bring an economy back on course that has been derailed without swallowing a bitter pill.”

Turkey’s March inflation data is due out on April 3 – and expected to show a further rise in the cost of living – so the next instalment of that cost could be about to fall due.  

Latest articles

Flooding in Dubai affected many people's homes. Emaar has promised .free repairs for its residents, and an upgraded sewerage system is planned

Emaar promises free repairs as Dubai launches sewerage system

Emaar Properties is offering free repairs to residents whose homes were damaged during this week’s extreme flooding, as Dubai also announced an AED80 billion ($22 billion) sewerage system. The developer announced on Friday that it would repair all homes in its communities affected by the historic levels of rain, “at no cost to residents”. Emaar’s […]

Construction work in Kuwait. Nurseries, schools and shops are being built for the new residential district of Al Metlaa

Kuwait signs $140m contracts for Al Metlaa development

Kuwait’s Public Authority for Housing Welfare (PAHW) has signed two contracts worth KD42 million ($140 million) to construct public buildings in Al Metlaa, a new residential district north of Kuwait City. Nurseries, stores, schools and shops will be included, state news agency Kuna reported. Electricity connections have been provided for 109 buildings in the district, […]

Iraq gas oil

Iraq to auction 30 oil and gas projects this month

Iraq will auction 30 new oil and gas projects in two licensing rounds before the end of April. The bidding round will be held on April 27, Reuters reported, citing an oil ministry statement. Last October Iraq passed a long-awaited oil and gas law, which will help the country attract more international investments into the hydrocarbon industry and boost government revenues.  Ali Metwally, an […]

Workers at Cano Limon oil field in eastern Colombia. Oil is one of the country's largest exports

UAE strikes Colombia deal to strengthen Latin American links

The UAE has strengthened trade relations with Latin America after signing a comprehensive economic partnership agreement with Colombia, just days after a Cepa deal was struck with Costa Rica. Officials from the UAE and Colombia put pen to paper on an agreement that will cut tariffs and remove trade barriers between the two countries. UAE […]