Time Is Running Out for Türkiye’s Opposition
For Türkiye’s opposition, time is the one resource running out fastest.
Last week’s economic data revealed two critical trends: slowing growth and rising unemployment. While these developments spell trouble for ordinary citizens, they might actually be good news for Türkiye’s policymakers. This paradox raises important questions. Why is a weakening economy seen as a positive by the government? What does this mean for the opposition’s political strategy? Are we past the worst of the economic troubles, or is there more pain ahead?
Let’s break it down.
The Economy: Growth Stalls, Unemployment Rises
First, Türkiye’s first-quarter GDP growth for 2025 came in at just 2% year-on-year, with a four-quarter average of 2.4%—far below historical norms. Manufacturing shrank by 1.8%, and agriculture declined by 2%. The only bright spot was construction, which grew by 7.3%, driven largely by post-earthquake rebuilding efforts. The takeaway is clear: without government-led construction spending, Turkey’s economy would likely be in recession.
Second, fixed capital formation, a key measure of investment, shows worrying trends. Machinery and equipment investments, which are crucial for long-term productivity, are stagnating or even falling. Meanwhile, construction investment, boosted by disaster recovery efforts, has become the main growth driver.
Third, on the jobs front, the situation is deteriorating rapidly. Headline unemployment jumped from 8% to 8.6% in just one month between March and April 2025. Even more alarming is the surge in the broader "idle labor force rate," which includes discouraged workers, climbing from 28.8% to 32.2%. A weakening job market typically leads to lower consumer spending, which could further slow the economy in a vicious cycle.
Why the Government Sees This as Good News?
At first glance, these numbers look bad. But policymakers see them differently. They believe slower growth will lead to lower inflation. By cooling demand, the Central Bank hopes to rein in price rises. The economic fallout from the March 19 Operation was contained through financial tightening, improving the odds of hitting inflation targets.
The Unintended Consequence of March 19 in Türkiye: A Window to Tame Inflation?
In my previous piece, I argued that economic conditions would not rank among the top five factors capable of diverting the Erdoğan government from its current trajectory. Developments over the past two months have confirmed this thesis. Today, I would like to push the argument further: the March 19 Operation may well serve as an
The big question now is when financial tightening will ease. There are several possible scenarios. The Central Bank could start cutting interest rates as early as next month, though this risks reigniting inflation. Alternatively, it might first loosen macroprudential restrictions while delaying rate cuts. If the downturn worsens, we could see a mix of both measures. Most analysts expect at least one easing move by July. If the government navigates the next few months smoothly, 2025 could end with faster rate cuts, signaling the worst is over.
Political Implications: Time Running Out for the Opposition
Turkey's opposition finds itself in a politically delicate position amid the ongoing economic turbulence. While current conditions—particularly rising unemployment and slowing growth—provide fertile ground for challenging the government, this advantageous position may prove temporary. If economic indicators begin showing even modest recovery in the coming months, the opposition's most effective critiques could lose considerable impact.
The timeline is tightening. Any economic stabilization, however partial, would enable the government to credibly claim it has navigated through the worst. With each passing week, the opposition's window to effectively harness public dissatisfaction grows narrower.
This juncture represents a critical political moment. The opposition must consolidate its position now, before potential economic improvements reshape the public mood and alter the political calculus.