Turkey is suffering from a significant economic downturn that began in late 2021, when the Central Bank cut interest rates and inflation accelerated. There is not a clear path out of the crisis for the government of President Recep Tayyip Erdoğan, who is preparing to run for re-election in 2023 in the Republic of Turkey’s centenary year. Internationally, Erdoğan is making conciliatory moves towards several countries with which Turkey has had disputes in recent years while also pursuing a middle path with regard to Russia’s invasion of Ukraine, meaning that Ankara has been able to preserve important trade and economic exchanges with Moscow while serving as a mediator between Kyiv and Moscow during the crisis.
Turkish President Recep Tayyip Erdoğan has taken a conciliatory approach to many foreign-policy issues since 2021, which is a notable change given the many assertive and uncompromising positions he had adopted previously. From 2015 to 2020, Erdoğan deployed the Turkish Armed Forces to fight in conflicts in Libya, Iraq and Syria, established a permanent military base in Somalia and threatened Greece and Cyprus over disputed territorial claims. But by late 2020, these policies had produced few clear successes and serious economic problems began drawing Erdoğan’s attention to domestic matters.
A major economic downtown began in late 2021, with extremely high rates of inflation (see Figure 1) undercutting living standards and support for the president’s Justice and Development Party (AKP). In May, a Turkish poll-of-polls revealed that support for the AKP fell below 30%. Erdoğan, who is personally resistant to raising interest rates to quell inflation, may hope that he can attract public support by increasing Turkey’s profile on the world stage and seeking international economic opportunities ahead of elections that will occur by June 2023.
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