The victory of the Justice and Development Party (AKP) in Sunday’s parliamentary elections got a cheery welcome from Turkey’s financial markets. With good reason.
The AKP has presided over impressive economic gains in Turkey since 2002. The economy has grown about 7 per cent a year on average, and the budget deficit has been reduced from nearly 15 per cent of gross domestic product to just 0.7 per cent of GDP last year. Backed by an IMF programme, inflation has fallen from more than 70 to less than 10 per cent. Meanwhile, the domestic stock market has quintupled in value. Even if serious economic concerns remain – the yawning current account deficit, for one – investors should be pleased that Turkey will remain under the same management.
