The draft election manifesto of Turkish President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP) marks a return to more orthodox, free market economic policies, four sources familiar with the matter told Reuters.
Turkey is due to hold presidential and parliamentary elections on May 14 and opinion polls show that Erdoğan will face his biggest electoral challenge yet in his two decades in power.
Erdoğan’s popularity has suffered mainly due to an erosion of living standards caused by the depreciation in the Turkish lira at a time when Ankara began pursuing a controversial economic model that was based on low interest rates.
In 2021 Turkey embarked on a rate-cutting cycle in the face of soaring inflation, defying traditional monetary policy and running against a global trend of rising borrowing costs.
Turkey’s fiscal woes were also exacerbated when a huge earthquake struck its southern regions on Feb. 6, killing thousands and leaving millions of people homeless and causing billions of dollars’ worth of damage.
Since August, the currency has been largely stable thanks to authorities’ heavy hand in the forex market.