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Turkish economy is key election issue

Wednesday, June 03, 2015 - 02:22

Campaigning for Turkey's election has entered its final few days with the economy one of the key issues. As Amy Pollock reports the vote could reshape the political landscape in one of the last decade's fastest growing economies.

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Tayyip Erdogan sees himself as Turkey's strongman. And under his leadership the Mediterranean country has certainly had a strong decade in economic terms, in 2010 GDP touched 12 percent. As Turks elect a new parliament on Sunday, outsiders are nervous - they're wondering if his strong government is getting in the way of growth. Jan Randolph is head of sovereign risk analysis at IHS Global Insight. (SOUNDBITE) (ENGLISH) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH: "If there is an AKP overwhelming victory that will simply reaffirm Erdogan's power base and underline the more centralised, heavy-handed kind of government that he has undertaken. That is of great concern and quite disconcerting not only for other people in Turkey but also foreign investors." Growth in the G20 country has stalled, at just under three percent in 2014. And Turkey's current account deficit, standing at over five percent last year remains a worry. Critics say there is too much reliance on construction, private consumption and debt. Erdogan's Islamist-rooted AK Party looks likely to remain the biggest. But it may not win two thirds of the votes - and it needs that to implement constitutional change. The weak economy has been an opportunity for the main opposition Republican People's Party and the pro-Kurdish People's Democratic Party. And there's a chance AKP may not even win a majority. Questions about the cost of new 1,000-room Presidential palace aren't helping. Headlines about golden toilet seats - firmly denied by Erdogan - don't go down well with voters. (SOUNDBITE) (Turkish) ISTANBUL RESIDENT, NEZAHAT AKCA, SAYING: "We cannot bring a loaf of bread home. My husband is unemployed and my children are crying of hunger." (SOUNDBITE) (Turkish) ISTANBUL RESIDENT, ADNAN, SAYING: "We expect to wake up to a morning without the AK Party, that will be a morning of freedoms, equality and sharing." Much of Turkey's success has been attributed to Erdogan's deputy. Ali Babacan has been in office for 13 years and can't stand again. Keeping him on the team in another role would reassure investors and help the currency. That's another issue - the lira has been in freefall this year - some investors blaming political meddling in monetary policy.

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Turkish economy is key election issue

Wednesday, June 03, 2015 - 02:22