Turkey: the end of a golden era?

There is a strong possibility that this month’s parliamentary elections in Turkey will return a weaker government. If so, then GDP growth could slow to around 4.5% per annum over the medium-term, following a recent period of macroeconomic stability where economic growth has averaged 7%. What’s more, the macroeconomic environment could become much more volatile, with bond spreads rising above 400bps and the currency falling by up to 20%.