Erdogan's AKP divided on future economic policies before election runoff - reports
Disagreements over "unsustainable" economic policy under Recep Tayyip Erdogan have emerged within his own party days before Turkey heads to a second round of national elections.
An "informal group" from the ruling AKP are considering whether the Turkish President should abandon his policy of boosting the struggling economy with interest rate cuts and spending, according to the US news agency Reuters.
Erdogan, however, was not directly involved in the talks, which discussed alternative methods.
Turkey's economy has hit the rocks in recent years, with its currency collapsing in value.
Experts have blamed part of the problem on Erdogan's decision to keep interest rates low, which overheats the economy by making it cheaper to borrow money.
The informal group's plan reportedly does not include aggressively hiking interest rates, but a gradual transition to a policy rate in the lending market.
Several ideas beyond that, however, are being considered and the opposing group is yet to present the plan to Erdogan, according to the sources.
With the President seeking to reign for a third term, concerns over managing Turkey's crumbling currency and the increased cost of living are at an all-time high.
Turkey's tourism-dependent economy flatlined during the COVID pandemic but garnered 5.8% yearly average GDP growth between 2002 and 2021.
In September 2021, 1 US dollar was worth around 8 Turkish lira, yet by May 2023, this has lept to nearly 20.
A survey by Yöneylem Social Research Centre last year showed more than two-thirds of people in Turkey were struggling to pay for
food and cover their rent, prompting a surge in mental illness and debt.
Turkey's presidential election will go to a run-off on Sunday after no candidate failed to secure an outright majority of 50%, though the incumbent did get the largest share of votes.
One of the main agendas carried by the main opposition Kemal Kilicdaroglu was re-orienting the nation's economy with the adaptation of free-market principles.
Erdogan, on the contrary, hinted at a possible change in economic policies in order to attract international investors to counter Turkey's falling foreign reserves.