Experts: Turkish economy to continue flourishing after elections

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Tuesday 03 Nov 2015 - 11:20 Makkah mean time-21-1-1437 Ankara, (IINA) - Experts said on Monday that the Turkish economy would continue to flourish as an outcome of expected huge inflow of foreign investment following the victory of the Justice and Development Party (AK) in the elections, Anadolu Agency reported. “The end of political uncertainty in Turkey is good news for foreign investors. We can now expect ongoing coherence in financial policy and hopefully more rapid action on structural reforms”, said Christopher Dembik, an economist with Saxo Banque in Paris. Turkish Finance Minister Mehmet Simsek told the press on Sunday that political uncertainty had ended with the election result. “This is a great opportunity for us to carry out reforms”, he said. According to preliminary results based on 99.58 percent of votes counted, AK Party secured 49.41 percent votes, which is a higher proportion than any of the predictions by opinion polls, winning 316 seats of the 550-seat Grand National Assembly. Initial investor reaction could be gauged by the sharp rise of the Turkish lira against the dollar. The lira gained about 3 percent against the U.S. currency just after the election, and on Monday morning was trading at about 2.81 against the dollar. Borsa Istanbul’s BIST 100 index surged 400 points at the open to 84,000 but fell back to about 83,600 before 10 a.m. local time. “Investors had priced in concerns about a continuing period of instability, expecting no single party to be able to govern after this election”, explained Neil Shearing, chief Emerging Markets economist with Capital Economics, in an interview on Sunday night. “With a stable government installed, the government can take action to reduce the current account deficit and to stimulate job creation. Investors can now expect the government to take steps to increase economic growth”, Shearing said. “This is a critical transition for the country”. The current account deficit was at about 5 percent of Gross Domestic Product in October, according to official statistics. Bora Yilmaz, an economist with Ziraat Securities in Istanbul, pointed out that interest in Turkish lira assets will undoubtedly increase after this election result. “This will be a huge upside for lira assets”, Yilmaz said. “And, in the long run, Turkey won’t reverse her institutionalization process. Institutions will confirm the investment grade rating and probably further upgrades are in the pipeline on the back of the country’s stellar fiscal stance”. AG/IINA