TURKEY: RTRS-Erdoğan's Party Split On Post-Election Economic Direction

Reuters is reporting that there are divisions within President Recep Tayyip Erdoğan's Justice and Development Party (AKP) over the country's economic trajectory post-election (given the high probability that Erdoğan wins the 28 May run-off). Reuters reports that according to its sources, "...an informal group of ruling-party members have gathered in recent weeks to discuss how it might adopt a new policy of gradual interest rate hikes and a targeted lending programme.[...] On the other side are officials and cabinet members who publicly state they want to stick with the current programme of boosting exports and economic growth via rate cuts and heavily-managed forex, credit and debt markets."

• Reuters: "They are studying a new economic model... since the existing model cannot be sustained," said a senior official close to the matter. "Basically, it would gradually raise the interest rate and end the structure of using multiple rates."
• Reuters: "There are two different opinions within the party," another source, a ruling AK Party official, said. He added that any decision would seek to preserve economic stability through to the next critical election test: municipal polls in March next year. A third official said the strong election results could ultimately convince leaders "that a rapid change is not needed."
• Reuters: "The informal group working on a new plan is not considering aggressive monetary tightening, but rather a more gradual path that again emphasises the policy rate in lending markets, four of the sources said. Another option is using a public institution and state subsidies to deliver selective credit, they added."