Turkey International Reserves (USD bn)

International Reserves in Turkey

Economic growth should have slowed in Q1, as the earthquakes that hit the country in February heavily dented activity in the affected areas; in February, industrial output contracted at the sharpest rate since the onset of the Covid-19 pandemic. Shifting to the current quarter, April data shows some promise: The manufacturing PMI ticked up, while inflation declined. That said, consumers grew more pessimistic in the month. In politics, on 14 May, the country will elect a new president and Parliament. Polls suggest a very tight contest between Erdogan and the opposition. The election could be a turning point. Under Erdogan, the presidential system and unorthodox economic policies would likely remain in place. If the opposition wins, the country could revert to a parliamentary republic and economic orthodoxy.