The next general election is expected to be held in June 2011. Our baseline forecast is that the AKP will win a third term in government, which will last until mid-2015. Opinion polls in the 12 months before the constitutional reform referendum suggested that the AKP's lead over the CHP and the MHP had narrowed enough to prevent Mr Erdogan from winning a majority of seats in parliament. Although such a scenario still cannot be ruled out, the referendum result was a major setback for the two main opposition parties. Both campaigned vigorously for a "no" vote and have put up strong resistance to other reforms required to promote Turkey's EU membership bid, including those aimed at tackling the Kurdish issue, although the latter might benefit them if PKK violence escalates again. Expectations are high among secularists that the CHP's new leader, Kemal Kilicdaroglu, who was elected in May 2010, will succeed in transforming his party into a credible alternative to the AKP in government. However, the CHP has been beset with internal divisions and Mr Kilicdaroglu's control over the party appeared fragile until he successfully rejuvenated the executive at an extraordinary party congress in December. Persuading voters that the party has moved away from its traditionally hardline secularist/nationalist policy agenda to a more liberal stance on democratic reforms to improve the protection of minority rights and promote freedom of expression will be a tough challenge. The AKP's trump card will be the perception that since first coming to power in 2002 it has managed the economy well.

During the forecast period, Turkey will elect the head of state for the first time by universal direct suffrage. However, uncertainty exists regarding the timing of the election. In August 2007 parliament elected the current president, Abdullah Gul, for a single seven-year term. Subsequent constitutional changes introducing the direct election of the president also reduced the presidential term to five years, for a maximum of two terms. Under Turkey's current parliamentary system, the powers of the president are limited. However, the election will be fiercely contested. As happened in 2007, it is likely to become a battleground in the power struggle between the AKP and the secularist-nationalist elite. If the AKP were to introduce a presidential system, Mr Erdogan would probably be the front-runner to replace Mr Gul once his term is concluded.