Tomorrow is Election Day!

Türkiye is heading to the polls tomorrow. Voters will be at the ballot box for the most critical election in recent history. all eyes are on the potential actions that may be taken in regards to the economy and foreign policy.

While Türkiye has become a strong regional actor since 2002 and especially in the last decade, as a result of the policy pursued during the pandemic period and the Russia-Ukraine War, it has also taken on a decisive role in global issues. Despite the difficulties with the West, the ongoing EU membership process and Türkiye's effective position in NATO despite all negative developments have made Türkiye a closely watched and influential actor.

While steps taken during and after the pandemic increased Türkiye's share from supply chains, the shift of the world's economic center of gravity from the West to the East was well evaluated, and Türkiye's position as the "center of gravity" was strengthened. The "New Asia" and Africa overtures provided many opportunities not only in the field of international relations but also in the economy and energy. Despite criticism of "axis shift," Türkiye's relations with rising Asia were strengthened. The divergence between the government's current policy in this area and the opposition's approach has also increased curiosity about the post-election period.

Meanwhile, at times, the tensions in Türkiye's relations with the Western Alliance, which were justified in the context of various reasons, the contradiction of the US's activities in the region with Türkiye's interests, and finally, the combination of instability in neighboring countries have resulted in various economic challenges. The deviation of Türkiye's economic policy from mainstream policy proposals also made it one of the areas closely watched for the post-election period.

As a result, many international financial institutions have begun to publish analyses of possible scenarios after the elections. Bank of America recently released an evaluation report stating that if the opposition wins the election, policy rates could rise to 50%, and despite this, the devaluation of the Turkish Lira could reach 25%. Similarly, Goldman Sachs also stated that policy rates would be sharply increased if the opposition wins the elections. However, it was emphasized that the devaluation of the Turkish Lira would be more pronounced.

Fitch, citing the possibility of prolonged political uncertainty exacerbating macroeconomic pressures, characterized the elections as a crucial turning point due to different policy preferences. While it is possible to diversify examples, it is clear that tomorrow has become an "important election" day in every respect, no matter how you look at it. Of course, in Türkiye, voters do not vote solely based on the economy and foreign policy. In fact, we have seen in many elections that economic conditions have taken a back seat, and the approach to foreign policy and national issues has been prioritized by the electorate. Actually, the correlation we often observe between economic conditions and the ruling party's vote in other countries hasn't always held true in Türkiye.

I believe that a similar picture is more likely to emerge in this election as well. Meanwhile, it is essential to consider the sympathy towards Erdogan personally in election analyses. Furthermore, it should be noted that the habits triggered when the voter enters the ballot box are not adequately reflected in the polls.