Parliamentary and presidential elections on 14th May will make or break macroeconomic stability in Turkey. As things stand it looks more likely that opposition candidate Kilicdaroglu will become the next president and his party will have a majority in parliament. This will provide a route (even if challenging) to orthodox policymaking and sustainably lower inflation in the future. But an Erdogan victory remains possible, which we think would raise the risk of simultaneous currency, banking and sovereign debt crises down the line.
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