BMI View: We maintain our forecast for steady growth in Turkish defence spending throughout ourforecast period to 2026 - facilitated by the government's shift towards a more expansionary and strongpolitical willingness to reduce dependence on imports from NATO countries amid rising tensions - anddriven by still-elevated risks of terrorism, separatism and political unrest. Coupled with strong governmentsupport and evolving international trade and industry collaboration partnerships, this will ensure continueddevelopment and expansion of Turkey's already-substantial defence sector - and thus Turkish defenceexports - over the coming decade.
Recent Analysis And Developments
The failed coup on July 15-16 2016 and the subsequent shift towards an authoritarian regime, whichculminated with the April 2017 referendum suppressing the position of Prime Minister and handing allthe executive powers to the president has significantly raised long-term political risks in Turkey.
President Erdogan continues to tighten its grip on power, but this is increasing the risk of backlash. Thisauthoritarian shift will also lead to a deterioration of Turkey's relations with NATO members, andsupport greater cooperation with non-NATO members such as Russia and Pakistan.