By Ercan Gurses
Uncertainty about the formation of Turkey’s next government poses a risk to economic growth and the best scenario would be a strong coalition agreement rather than a fresh election, Finance Minister Mehmet Simsek said on Wednesday.
The ruling AK Party lost its majority for the first time in a parliamentary election on June 7, forcing it to seek a junior coalition partner or face a re-run, and plunging Turkey into political uncertainty not seen since the 1990s.
“Everyone wants Turkey to have a strong coalition government,” Simsek told a news conference in Ankara to announce June budget developments.
Coalition talks between the AKP and opposition parties entered a third day on Wednesday. The parties have until late August to agree on a working government or else President Tayyip Erdogan could call for a new election.
“Having an election again is of course a negative scenario because another election means in a sense facing uncertainty through virtually the whole of 2015,” Simsek said.
The central government budget showed a surplus of 3.2 billion lira ($1.21 billion) and a primary surplus of 4.9 billion lira in June, Simsek said, noting that a 15.8 percent rise in tax revenues in the first half had helped.
Inflation was likely to continue its fall this year if oil prices remain low and a normalisation in food prices continues, Simsek said. He welcomed Iran’s nuclear deal with world powers, saying it could reduce geopolitical tensions and help keep oil prices at a level beneficial to Turkey.