Turkey’s winter has been corrosive and divisive. The municipal elections were a success for Prime Minister Erdogan and may encourage him to run for the Presidency in August. To date, the markets have shrugged off allegations which would have toppled a lesser figure. But forecasts for growth in GDP in 2014 are being cut back.

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An economic position paper written for the seminar in Ankara hosted by the Central Bank for the Official Monetary and Financial Institutions Forum.