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Turkey re-elects Erdogan and sees positive economic signs

Posted on 01 April 2014

The Turkish nation has re-elected Recep Tayyip Erdogan as its prime minister, after his AKP party scored a resounding victory in the country’s local elections on Sunday.

Erdogan’s return to power is deemed by many as a positive step towards continuing the country’s strong economic development, thanks to his ambitious plans to attract foreign investment to the country, in particular Istanbul.

On the back of the re-election, the Turkish lira touched its strongest level for more than two months, brushing 2.165 against the dollar. Stocks were also buoyant opening almost two per cent up on Monday, to reach their highest levels in three months. Another boost were figures released this week that showed the Turkish economy grew by four per cent last year, thanks to an unexpectedly firm fourth quarter.

Meanwhile, further confidence comes from the announcement that the world’s leading investment bank, Goldman Sachs, has applied to Turkey’s Banking Regulation and Supervision Agency (BDDK) to open a liaison office in the country. Goldman’s new Turkish office will be its seventh in Europe. This follows the decision by BNP Paribas to shift its focus from the Ukraine, where economic conditions are currently difficult to Turkey. A BNP Paribas spokesman reported that the bank will close 84 branches and reduce staff by 1,600 in the Ukraine over the coming year and added: “Turkey is a thriving market; together with Poland, it posts a dynamic and ever-growing performance. With our focus on the Turkish market since 2002, we are satisfied with Turkey and are considering increasing our investments there.”

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