Cumhur Alliance has won a parliamentary majority, while the presidential election will go to a runoff

With the outlook still uncertain, monitor endorsement announcements from the third presidential candidate, Ogan

Turkiye completed its first round of elections on May 14, 2023. While the parliamentary election results have been confirmed, the presidential election results were inconclusive and will head to a second round of voting on May 28, 2023.

Uncertainty regarding Turkiye’s political and economic outlooks will extend for another two weeks, delaying decisions and the launch of measures that are needed to improve the economy. During these two weeks, the lira is likely to experience some pressure, which is already being observed in the differences in the exchange rates between the market and the banks, as well as between the sale and purchase rates within the same institutions.

Depending on the results of the election, Turkiye’s economy will be subject to new measures by the incoming president. While a higher-likelihood case of a victory for current President Recep Tayyip Erdogan will point to continuity of current economic policies, MNCs will need to monitor initial measures very closely. FrontierView expects credit costs to rise and the exchange rate to depreciate regardless of the results. Executives will mostly take a wait-and-see approach until May 28; however, preparations for ongoing uncertainty in economic policymaking, complications in financial regulations, and exposure to economic shocks should be expected in light of an Erdogan victory. Nonetheless, with some level of certainty returning to the markets, business and consumer confidence should see some recovery.


  • The Turkish lira dropped to TRY 19.71 to US$ 1 by Tuesday, another all-time record. However, this does not represent a serious depreciation, with more expected to follow in H2 2023.
  • Borsa Istanbul issued a circuit breaker after the index dropped by over 6% on Monday’s opening. The banking sector index dropped by more than 9%. 
  • Turkiye’s five-year CDS also reached 652 basis points.

Our View

The relatively large difference in votes for President Erdogan compared to main opposition candidate Kemal Kilicdaroglu and the majority ownership of the Cumhur Alliance in parliament will be two factors that increase the chances of a presidential win for Erdogan in the upcoming second round of voting in two weeks. However, the outlook is still highly uncertain, and executives will need to monitor announcements from the third presidential candidate, Sinan Ogan, regarding who he plans to endorse.

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