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18 I Companies & Markets bne July 2019
The country's central bank expects GDP growth of 3.5% this year.
The country’s gross general government debt is expected to increase 2.0pp in 2019 to 42.5%, before falling to 42.2% in 2020, close to the 'BB' median of 42.5%.
Fitch foresees that general government gap will widen to 2.4% of GDP in 2019 and 2.2% in 2020, driven by higher expenditure as well as arrears clearance this year.
Erdogan candidate suffers thumping defeat in Istanbul revote
Akin Nazli in Belgrade
The June 23 Istanbul revote has delivered an earthquake in Turkish politics—Ekrem Imamoglu, candidate for the main opposition party, has recorded a stunning victory over the candidate backed by President Recep Tayyip Erdogan, Binali Yildirim. Yildirim has conceded defeat.
The initial reaction from Erdogan saw him cancel a press conference but congratulate Imamoglu with a tweet, using his name for the first time in a month (lately he ordered his party's officials to describe him as "CHP's candidate"). In further tweets, indicating he was set to try and take
a business-as-usual approach despite a strategic move that has blown up in his face, he said Turkey is focused on its 2020 Centenary of the Republic targets and added that he would attend the G20 summit and visit China at the end of the month.
With 99.37% of ballots counted, Imamoglu had taken 54.03% of the vote for mayor compared to 45.09% for Binali Yildirim, giving him a lead of around 775,000
votes, according to state-run news service Anadolu Agency. Turnout was 84.42%.
The revote was called by Turkey’s election watchdog after the original election, held during the country’s March 31
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In 2018, general government deficit narrowed by 1.7pp in 2018 to 1.1% of GDP on the back of a large under-execution of public investment projects, 9.4% tax revenue growth, and improved local government balances.
“The improved credit rating will have a positive impact on investing decisions in the country, which will further result in higher economic growth, increased exports, more jobs and higher salaries,” North Macedonia’s Finance Minister Dragan Tevdovski commented on the improved rating.
Imamoglu, seen to have made a telling breakthrough as an antidote to populism, has achieved a stunning victory.
polls, produced a narrow victory for the secular Republican People's Party (CHP) candidate Imamoglu by 48.8% to 48.6% (with an official margin of around 13,000 votes). The result was disputed by Yildirim, Erdogan and their populist Justice and Development Party (AKP) on the basis of claimed “irregularities”.
The AKP and predecessor fellow Islamist-rooted parties ruled Istanbul for more than 25 years until the local elections.
The decision to call a revote was widely criticised abroad with, for instance, Turkey’s largest trading partner Germany saying there was absolutely no justification for it. But Erdogan was stung and embarrassed by the first vote as, with the debt-fuelled economy mired in dire trouble and Turkey’s human rights record coming in for more and more stinging criticism following nationwide crackdowns on Erdogan’s opponents, it was seen as a referendum on his 17-year-long rule. The revote too is seen as such a referendum as well as
a test of what remains of Turkey's democracy.
How strongman Erdogan reacts to this even worse humiliation, the biggest setback in his political career and a possible watershed moment for Turkey, is all-important. The Istanbul defeat could come to be seen as the beginning of the end for the pugnacious Turkish leader, who rose to