What’s happened?

A run-off will be held on May 28th between the president, Recep Tayyip Erdogan, and his main rival for the presidency, Kemal Kilicdaroglu, as neither secured 50% of the vote in the first round on May 14th. Mr Erdogan will enter the second ballot with substantial momentum from his lead in the first round. Moreover, his People’s Alliance has reportedly won a majority of seats in parliament. EIU continues to expect Mr Erdogan to be re-elected for another five-year term.

Why does it matter?

Although Mr Erdogan will not reach the 50% threshold required to avoid a run-off election, the preliminary first-round results give him a strong lead in the presidential election and a parliamentary majority. The Supreme Election Council (YSK) announced on May 15th that Mr Erdogan had won 49.4% of the vote, compared with 44.96% for Mr Kilicdaroglu. The ultra-nationalist Sinan Ogan took 5.2%, and Muharrem Ince, despite his last-minute withdrawal, garnered 0.44%.

In the parliamentary election, the official Anadolu Agency estimates that the People’s Alliance parties, headed by the president’s Justice and Development Party (AKP), have won 321 of the 600 seats with 49.3% of the vote. The parties of the centrist Nation Alliance, including Mr Kilicdaroglu’s Republican People’s Party (CHP), have won 213 seats (35.2%). The CHP has complained of delays in announcing the results. However, the opposition appears not to be disputing the overall result.

With this momentum from the first round, Mr Erdogan is well positioned to win the presidency. His ruling coalition has reportedly won a majority of seats in parliament, enabling him to argue that a win for him will mean stability. Furthermore, we expect the redistribution of votes from Mr Ogan to favour Mr Erdogan.

With Mr Erdogan very likely to be re-elected, concerns about the economy, given the unorthodox policies his administration has pursued, will continue. The president will continue to make most decisions himself, meaning that foreign and economic policy will remain unpredictable. EIU expects some lira volatility in the run-up to the second-round vote, but this will be limited by central bank support.

What next?

EIU maintains its forecast that Mr Erdogan will be re-elected for a further five-year term, and expect the opposition to accept the result. Foreign and economic policy will remain unpredictable, and investor interest in Turkey will remain muted. EIU expects the EU, the US and NATO to continue to pursue a pragmatic relationship with Turkey, but major frictions will continue in Turkey’s relations with its traditional Western allies. Turkey’s Middle East foreign policy about turn will continue in the hope of reviving trade ties and boosting the country’s economy.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the economic, political and policy outlook for nearly 200 countries, helping organisations identify prospective opportunities and potential risks.