Tayyip Erdogan is unlikely to sack Finance Minister

Following nationwide local elections on March 31 that dealt a surprise blow to Turkey's ruling AK Party, attention now shifts to the economy to gauge if the divided political landscape will lead to tougher economic measures. The AKP placed second in the polls for the first time since assuming power in 2002, largely attributed to economic challenges like soaring inflation nearing 70% and weakening purchasing power. Emre Peker, European director of political risk consultancy Eurasia Group, believes President Recep Tayyip Erdogan is unlikely to dismiss Finance Minister Mehmet Simsek due to the pre-election lira sell-off and the Turkish Central Bank's dwindling foreign reserves, as this move could worsen economic strain on Ankara. “Nevertheless, after his election losses, Erdogan will demand to see results, especially in the fight against inflation. The picture will get worse before it gets better, with inflation expected to peak in May,” Peker said. Simsek and his team have worked hard to normalize policy since taking office in June last year, securing significant investment pledges from the Gulf. Fitch recently upgraded Turkiye’s credit rating to B+.