The Economist Intelligence Unit's baseline political forecast for Turkey over the next five years is that the religiously conservative, pro-EU Justice and Development Party (AKP), led by the prime minister, Recep Tayyip Erdogan, will win the general election on June 12th 2011, allowing the AKP to form a single-party government for a third consecutive term. We expect the political scene to remain volatile up to and beyond the election, mainly as a consequence of the tension between the AKP and the secularist/nationalist elites, including the main opposition party, the Republican People's Party (CHP), and sections of the military and the judiciary, who view the ruling party with suspicion because of its pro-Islamist roots and its tightening grip on Turkey's civilian institutions, especially the judicial system. However, following the government's victory in the constitutional reform referendum in September 2010 we believe the risk of a political crisis that could destabilise the government and undermine the confidence of the financial markets in Turkey's medium-term economic prospects has diminished.

In the referendum, a larger than expected majority (58%) voted in favour of the AKP's constitutional reform package, which increased civilian oversight of the military and overhauled Turkey's two highest judicial bodies, the Constitutional Court and the Supreme Board of Judges and Prosecutors (HSYK), which is responsible for appointing judges and prosecutors. The hardline secularist chief prosecutor of the Supreme Court of Appeals, who launched a lawsuit to try to close the AKP during 2008, warned the party in October 2010 against another attempt to lift the ban on women wearing the Islamic-style headscarf in universities and public offices. However, the Constitutional Court would probably be reluctant to take up another petition to close the party. The military, once the most respected institution and self-appointed guardian of the secular state, is likely to maintain a low profile, as its reputation has been tarnished by allegations of plots to destabilise the AKP government and the perception that the deaths of many Turkish soldiers fighting the militant Kurdistan Workers' Party (PKK) could have been avoided.

The AKP is setting the election agenda, based on its calls for increased democratisation and a new constitution to replace the current 1982 military-inspired constitution. This is forcing the CHP and the smaller, right-wing Nationalist Action Party (MHP), also in opposition, to try to refresh their images and revamp their traditional policies. If the AKP wins a third term, it may try to introduce a presidential system, giving executive powers to the president. This will be hard to achieve, as it will encounter significant political opposition, and we do not expect the AKP to have a large enough parliamentary majority to change the constitution without opposition support or a referendum. The debate surrounding such far-reaching institutional change would be highly divisive. However, we believe that it is unlikely to affect Turkey's overall political stability, as illustrated by the constitutional reform referendum in 2010. That campaign was hard fought but generally peaceful. Both the CHP and the MHP and the conservative sections of the judiciary immediately acknowledged the legitimacy of the result.