Under pressure

TURKEY - Report 24 May 2026 by Murat Ucer and Atilla Yesilada

With the stroke of a gavel, CHP was returned to former chairman Kemal Kilicdarolgu, triggering a bitter and legally murky leadership battle. The politics author nevertheless thinks court-deposed chairman Ozgur Ozel has the upper hand, and if he loses the legal battle for the soul of the party, retains the option to migrate to an already-established “spare political party”. The appellate court ruling declaring the CHP Grand Convention null and void, immediately stoked a pundit blitz claiming snap elections are underway. The politics author thinks this is neither feasible, nor logical, so he doesn’t change his scenario of elections not being called before very late 2027.

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There is not a whole lot to report on the economics front. Sectoral confidence indices, except for consumer confidence, declined in April-May combined over the previous quarter, pointing to a relatively visible retreat in the soft data. The ongoing widening in trade deficit had a pause in April, thanks to a strong rebound in exports, in line with the preliminary data released earlier, but we do not think this is a trend reversal. Reserves rose modestly in the week through May 15, once we take into account the drop in gold prices. We shall see Thursday-Friday’s damage in reserves this Monday-Tuesday as the CBRT balance sheet becomes available, although first impressions are that local F/X demand appears to have remained subdued so far, anecdotally speaking.

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