Erdogan vows to make amends after humbling election loss in Turkey

President Tayyip Erdogan vowed on Monday to correct any mistakes that led to his party's defeat in Turkey's local elections where the opposition capitalised on economic woes and alienated Islamist voters, casting uncertainty over his reform plans.

Sunday's vote marked Erdogan and his AK Party's (AKP) worst defeat in more than 20 years in power, revitalising the opposition party and strengthening Istanbul Mayor Ekrem Imamoglu's standing as the president's main rival.

Redrawing a political map long dominated by the AKP, the Republican People's Party (CHP) won the popular vote for the first time in decades and swept most of the main cities, penetrating far into conservative central Turkey.

Analysts said voters lost patience with both a cost-of-living crisis driven by near 70% inflation and Erdogan's divisive political style.

The result bruised his hopes of adopting a new constitution, which could potentially extend his rule beyond 2028 when his term ends, they said. Though AKP and its allies have a majority in parliament, Erdogan would need broader support or a successful referendum for a new constitution.

Erdogan delivered a sombre and introspective speech in the early hours of Monday. "This is not an end for us, but actually a turning point," he said, acknowledging a "loss of altitude" for the AKP.

"If we made a mistake, we will fix it," he told crowds gathered at AKP headquarters in Ankara, without indicating what changes he might make within his party or in policy.

In response, Turkish stocks rose and the lira - which has shed more than 80% of its value in five years - touched another record low versus the dollar on a holiday for many world financial markets.

INFLATION BITES

Erdogan made an abrupt U-turn in economic policy after his triumph in a national election last year, resulting in aggressive interest rate hikes to rein in inflation expectations that soared under his years-long unorthodox policy stance.

Erdogan has asked for patience with slower economic growth and high borrowing costs, promising reprieve later this year, and Finance Minister Mehmet Simsek said on Monday the belt-tightening programme would carry on.

But AKP election candidates were thumped in the cities of Istanbul and Ankara and even in deeply pro-Erdogan strongholds like Bursa, Afyonkarahisar and Adiyaman provinces.

"I think it's mainly about the economy and in particular the inflation...story. I think voters decided to punish Erdogan for these reasons," said Wolfango Piccoli, co-president of political risk consultancy Teneo.

He said AKP lost control of industrial regions where lots of workers are on a minimum wage, which has trailed inflation despite big rises.

AKP overall "suffered due to over-confidence hubris," Piccoli said, pointing to the success of the Islamist New Welfare Party, which emerged as the third biggest party in a big surprise, with 6.2% support.

"All parties need to move away from polarisation and do something for our country with unity," he said in a public square on the Asian side of Istanbul. "People are sick of fighting and arguing."