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Turkey election pledges foretell bigger budget deficit

A review of economic programs and a supplementary budget appear inevitable for the winner of Turkey’s May 14 elections.
Turkey's Republican People's Party (CHP) Chairman and Presidential candidate Kemal Kilicdaroglu speaks on the stage during a rally in Kocaeli, on April 28, 2023. - A sea of umbrellas and hoods at his feet, Kemal Kilicdaroglu, the Turkish opposition candidate who will challenge Recep Tayyip Erdogan at the polls on 14 May, smilingly promises "the return of spring". (Photo by Yasin AKGUL / AFP) (Photo by YASIN AKGUL/AFP via Getty Images)
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ISTANBUL — Both the government and the opposition have made a seemingly endless stream of economic pledges in the run-up to Turkey’s crucial May 14 elections.

As voters grapple with the worst cost-of-living crisis under President Recep Tayyip Erdogan’s two-decade rule, Erdogan has expanded his pledges almost by the day, feeling the heat of opinion polls that have shown him increasingly trailing his main challenger. Though Turkey’s opinion polls are usually taken with a grain of salt, Kemal Kilicdaroglu, the joint presidential candidate of a six-party opposition alliance, appears ahead of Erdogan in the most recent surveys, and some observers believe he could even clinch victory in the first round of what is expected to be a close race. An Al-Monitor/Premise polled released this week showed the two main contenders statistically tied in the event of a runoff.

Erdogan’s spending spree ahead of the elections and the whirlwind of pledges by both sides raise the specter of a budget deficit unseen in the past two decades and further impediments to controlling inflation. 

The state budget already registered a deficit of over 250 billion Turkish liras ($12.9 billion) in the first three months of the year, amounting to 38% of the deficit that was projected for the whole year. The gap is likely to reach at least 1 trillion liras, or 6% of gross domestic product, by the year's end. The two huge earthquakes in southern Turkey in February have contributed to the widening gap, and quake-related spending will continue to strain the budget in the next several years. A review of economic programs and a supplementary budget appear inevitable for the winner of the elections. 

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