The AKP will take a step back

SAFAKNA TURKEY – ÜAccording to sources briefing the Reuters news agency on the AKP’s draft election program, the program will not refer to the recent economic policies of the Erdogan administration, but will instead return to the party’s former traditional approach.

The sources, who did not want to be named because they were not authorized to speak on the matter, said: “The approach to the economy is very similar to the AKP’s 2002 election manifesto. In other words, the AKP is returning to its roots.”

A senior SEP official said the manifesto does not mention a new economic model, but emphasizes principles previously advocated by the SEP, such as fighting inflation, public sector accountability and transparency in tenders.

The official said the project’s priorities include free market economy rules and practices that parallel those that apply in the global economy, and that “there are no signs of non-market practices.”

He added that Erdogan must ultimately approve the program, and so far has not presented any counterarguments.

The name of Mehmet Simshek is mentioned.

Noting that work on the project is in its final stages, the official said Erdogan wanted to give Mehmet Simsek, the world-respected former deputy prime minister and finance minister, a leading role in running the economy.

In 2012, when Shimshek was actively involved in managing the economy, the share of foreigners in the bond market denominated in lira reached 25 percent.

According to the Ministry of Finance, at the end of January this figure was 0.8 percent. Shimshek served as Deputy Prime Minister until 2018.

An asset manager from investment group TWC, who Reuters spoke to for comment, stressed that “a return to orthodox economic policy will be welcomed by investors, but foreign investors will be wary of such news.

Unlike traditional monetary policy, in the face of rising inflation in 2021, Turkey entered a cycle of lower interest rates, opposing the global trend of rising borrowing costs.

This, combined with rising energy and food prices caused by Russia’s invasion of Ukraine in February 2022, pushed inflation in Turkey to over 85 percent last year.

Turkey’s financial problems were exacerbated by the February 6 earthquakes, which killed thousands, left millions homeless, and caused billions of dollars in damage.

Following the earthquakes, the budget deficit rose to 171 billion lira in February, while the trade deficit widened by about 53 percent to $12.2 billion in the same month.

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