Political uncertainty could hurt Turkey's growth

Standard & Poor's says an early election could hurt the Turkish economy if business investments are postponed

Political uncertainty could hurt Turkey's growth

World Bulletin / News Desk

 Early elections could potentially hamper Turkey's growth if business investments are postponed, the U.S.-based credit rating agency Standard & Poor's (S&P) said Thursday. 

"As we understand it, if a government is not formed within 45 days of the speaker's appointment, early elections would likely be held in November this year. Under this scenario, we believe political uncertainty would remain heightened until the end of the year, which could potentially hamper growth if business investments are postponed. Further volatility of the Turkish lira -- which has already depreciated 2.8 percent against the dollar since the elections -- could have implications for consumer confidence and inflation."

S&P sees a coalition between the Republican People's Party (CHP), the Nationalist Movement Party (MHP), and the People's Democracy Party (HDP) as unlikely given their ideological differences. The AK Party won 41 percent of the vote in the June 7 election, with the CHP following at 25 percent.

"In previous publications on Turkey, we have noted the pressures on key independent institutions, including Turkey's central bank, which have undermined policy credibility and economic stability. This is one factor underpinning our negative outlook in the ratings," S&P said.

Güncelleme Tarihi: 18 Haziran 2015, 13:51