[00:00.00]Turkey is busy preparing for elections later this month.
[00:05.26]President Recep Tayyip Erdogan hopes to be re-elected in the June 24 vote.
[00:13.79]Erdogan says the latest reports on the Turkish economy show his economic policies are working.
[00:22.50]Voters and international investors, however, are not so sure about the country’s economic strength.
[00:31.73]The economy grew by 7.4 percent in the first three months of this year.
[00:39.12]That growth rate beat what many economists expected for the quarter.
[00:45.67]“We continue to be one of the fastest-growing countries in the world,” the Turkish president said at an election campaign stop in Istanbul.
[00:57.01]Erdogan claimed victory against what he called “conspirators” whom he blamed for a sharp drop in value of the Turkish lira.
[01:09.44]In May, the lira fell more than 10 percent as investors fled the Turkish market over concerns about high inflation and a growing current account deficit.
[01:23.37]Financial order returned after a sharp increase in interest rates, which helped the lira’s value rise against other money.
[01:34.62]But experts warn the strong growth will only fuel concerns that the government cannot continue to spend lots of money on public services.
[01:47.20]“The current account deficit is more than 6 percent of GDP and inflation above 12 percent,” Inan Demir of Nomura Holding noted on Monday.
[02:00.42]Demir, an economist, added that after the elections the government must cut back on spending or the value of the lira will fall again.
[02:12.89]A slowing economic policy usually means reduced government spending and higher interest rates.
[02:21.11]Turkey’s strong economy has helped Erdogan and his AK Party during their 16 years of electoral success.
[02:31.96]The economy has been expanding for over a year.
[02:35.90]But studies have found that many Turks are dissatisfied with the government’s economic program.
[02:43.62]Fifty-one percent of likely voters who were questioned said the economy was their major worry.
[02:51.76]The Metropoll research service reported the finding.
[02:56.54]Last year, security problems were the number one concern among voters.
[03:02.56]Other studies found that a majority of voters blamed the government for their economic problems.
[03:10.10]“It’s a…liability for Erdogan,” said Atilla Yesilada of Global Source Partners.
[03:18.45]He noted that while employment has decreased, prices have risen.
[03:25.22]He also said no one is investing in new factories because interest rates on loans have topped 22 percent.
[03:35.02]Yesilada explained that the economic growth has not helped the people on the streets, so there is a lot of public anger.
[03:45.85]Turkey’s unemployment rate remains about 10 percent.
[03:50.07]That information comes from the Turkish Statistical Institute.
[03:55.44]In May, Erdogan announced retirees would receive two payments of over $200 timed to religious holidays.
[04:06.61]The first payment is set to go out this week.
[04:11.14]But Atilla Yesilada warned that the money means little because of the financial pain caused by the increase in interest rates.
[04:21.80]“We all use loans. The middle class use loans to buy houses.
[04:27.38]Businesses use loans to expand.
[04:30.73]Even before the latest (interest) hikes, they were already at a 10-year high.
[04:37.11]Banks have nearly stopped making new loans,” Yesilada said.
[04:42.83]He added that a recession is likely.
[04:46.69]Candidates competing against Erdogan for the presidency talk about economic fears.
[04:53.20]“Erdogan can’t survive this economic crisis,” Muharrem İnce said during a recent campaign appearance in Istanbul.
[05:03.92]İnce is the presidential candidate of the CHP Party.
[05:09.32]He said that “Turkey is heading to dark days.
[05:13.81]Don’t be surprised if the Turkish lira hits 8 or 10 to the (United States) dollar.
[05:20.74] When troubled days have come to countries around the world, they couldn’t get through them unless they changed leaders.”
[05:29.44]In May, at the start of the election campaign, the lira was less than four against the U.S. dollar.
[05:38.04]It now stands at over 4.5. Its high was nearly 5 to the U.S. dollar.
[05:46.46]Erdogan's public works projects are also a target in the election campaign.
[05:53.56]They include building one of the world's biggest airports and some of the longest bridges.
[06:01.20]The presidential candidate for the İYİ (Good) Party, Meral Aksener, said Turkey has the financial resources, but she thinks some officials are corrupt.
[06:14.27]She noted that the government built up a budget deficit of $453 billion in debt. “What happened in return? Did your son find a job?"
[06:29.08]Turkey watchers believe the attacks by Erdogan’s opponents over the economy are likely to grow stronger.
[06:36.89]Economic concerns are expected to continue to be the main issue in the June 24 elections.
[06:44.86]The election campaign is leading to less than certain results, noted Sinan Ulgen, head of the Istanbul-based Edam research group.
[06:56.95]He added that the Turkish lira is under pressure because of worries about the direction of the economy.
[07:04.42]Anti-Erdogan politicians accuse the president of calling elections 18 months early so he could take use the country’s strong economy to support his campaign.
[07:17.81]But many studies of likely voters now show Erdogan’s lead is getting smaller.
[07:24.63]Observers warn the economy that was once Erdogan’s greatest strength could be what leads to his removal from office.
[07:34.28]I’m Anna Mateo. And I'm Ashley Thompson.