First predictions on new election results

TURKEY - In Brief 25 Aug 2015 by Atilla Yesilada

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First predictions on new election results It is official. Turkey will be heading for the ballot box on 1st of November, under the premiership of Prof Davutoglu, who is expected to announce his Election Government Cabinet on Friday. He is extending offers to CHP, MHP and HDP, but the first two will impolitely decline. Despite all the maneuvers for the third to do so as well, HDP appears happy to be in the Cabinet and should be rewarded with 3 minor portfolios. As minor as these seats may be, the pro-Kurdish Rights party is expected to raise a lot of havoc, possibly in the debate and on the decisions regarding security matters, i.e. PKK and ISIS. Assuming Babacan and Simsek will be reapportioned, this Cabinet is capable of dealing with economic shocks emanating from another EM panic attack or unexpected Fed tightening moves, but CBRT will remain exposed. Judging from the silence of the a.m. gentlemen in the face daily reminders by Economy Minister Zeybekci that rate hikes are bad, it appears that AKP has reached a consensus to keep the pressure on the Bank to refrain from monetary tightening, unless the conditions get “really bad”, which is something I can’t quantify. The 1st of November election date is sooner then expected, and as far as I am concerned the sooner the better. Today’s CU and business confidence data suggest the economy is slowly crumbling under political uncertainly, while the currency is in emergency ward. While the AKP member dominated and pro-AKP interdependent staffed Cabinet is likely to resort to some fiscal stimulus, with only 65 days to elections, its size and scope is probably not going to be impressive—good news for the budget and credit rating...