Chart of the Week: ‘Miserable’ economic conditions deal blow to ruling party in Turkey

Turkey’s ruling Justice and Development party (AKP), led by President Recep Tayyip Erdoğan, suffered a blow in local elections, with early results pointing to the loss of mayoralties in the country’s two largest cities, Ankara and Istanbul. The incumbent party went into the elections vulnerable due to a weak economic backdrop, with annual GDP growth in negative territory and both inflation and unemployment elevated. Indeed, Turkey’s ‘misery index’, which adds together headline CPI inflation and the unemployment rate, has risen sharply higher over the past year or so. Since 2005, this measure of household wellbeing has averaged less than 20%. However, after a sharp fall in the lira last year, and consequent stagflation, it finished 2018 at 33%, reflecting increases in both inflation and the unemployment rate. Despite that, the AKP managed to secure over 50% of the votes nationwide, and appeared set to only lose the Istanbul mayoral seat by the slimmest of margins. With that in mind, the better question may not be why the AKP did so poorly, but how they managed to avoid doing even worse.

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