At the helm of Turkey since 2003, Erdogan has presided over the transformation of the country into a regional powerhouse from an economic minnow. Much of this was achieved through foreign-currency borrowing, a strategy that began misfiring in 2018 when international investors’ appetite for investing.
The Turkish lira fell sharply against the dollar and the euro, increasing inflation and increasing the debt burden in foreign currencies.
Turkey's economic output fell by 2.6 percent in the first quarter compared to the same period last year, the National Statistics Agency said on Friday.
This came after a 3% contraction in the last three months of 2018. The data showed that weakness in Friday's figures resulted from further contraction in consumption and domestic construction, for a long time among the main engines of economic activity in Turkey.
Most economists point to recent declines in confidence in both investors and consumers in the expectation of a renewed contraction. The Organization for Economic Co-operation and Development (OECD) expects the Turkish economy to contract by 2.6 percent in 2019.
Turkish President Recep Tayyip Erdogan suffered a major blow in late March after his party lost a series of municipal election strongholds across the country, with voters registering resentment over rising inflation and slow growth.