The result of Turkey’s November 1 election saw the country’s Justice and Development Party (AKP) win back its majority in the Turkish Government and as a result inject confidence into the country’s markets and currency.
Instability and uncertainty had prevailed in Turkey after the inconclusive election in June, which saw President Recep Tayyip Erdogan’s AKP lose its majority ruling. On the news that they had regained control, the Turkish lira jumped more than four per cent against the US dollar and the main index on the Istanbul stock exchange, the BIST, soared more than five per cent.
Industry analysts now predict a period of strength for the lira, while credit agency Moody’s said the new government should benefit the Turkish economy as a whole. Thanks to a proven business friendly track record since it first came to power in 2002, the AKP government is expected to make adjustments to boost the country’s economic performance and shift its export model to a more value-added one that increases revenues. It is hoped interest rates will also be lowered from the current rate of circa 7.5 per cent.
AKP has also been instrumental in opening up Turkey’s property market to foreign buyers and encouraging growth - this trend should continue now. A leading developer in Istanbul has commented how AKP regaining power, and the stability this brings, should encourage more investment in property developments. While housing sales dropped in September compared to the same month in 2014, analysts believe this is largely down to a ‘wait and see’ attitude before the election results - housing sales are now forecast to pick up again.