ISTANBUL (Reuters) - Turkish Prime Minister Tayyip Erdogan's ruling AK Party was set to win Sunday's parliamentary election with 50.2 percent of the vote, but looked unlikely to get enough seats to call a referendum on a planned new constitution.
A Muslim democracy and candidate for the European Union, Turkey has become an economic powerhouse and influential player on the global stage since Erdogan's AK Party first swept to power in 2002.
If the partial results based on 90 percent of the vote are confirmed the AK would be forced to seek agreements with other parties to press on with plans to replace the existing charter, written almost 30 years ago during a period of military rule.
Based on the incomplete count, AK looked set to win 327 seats, just below the 330 required for a plebiscite and less than the 331 it had in the last parliament, according to broadcaster CNN Turk.
The slip will take some of the gloss off the AK success in winning a third consecutive term and four more years of single party rule, but analysts reckoned it would be good for both the economy and democracy in Turkey.
"It seems the election outcome is heading toward the best-case scenario for the markets: a solid majority for AKP but short of the 330+ seats required to amend the constitution and put it to a referendum," said Wolfango Piccoli, an analyst at Eurasia Group risk consultancy in London.
"Falling short of 330 seats, the AKP would be forced to enter into negotiations with the opposition for the desired changes: a scenario that should help to limit the risk of further polarisation."
The centre-left CHP was on 25.8 percent while the nationalist MHP was on 13.2 percent, exceeding the 10 percent threshold required for parties to enter parliament, CNN Turk said.
STRONG SHOWING BY KURDISH INDEPENDENTS
There were no significant reports of trouble, even in the restive Kurdish region, where a strong showing by independents fielded by the pro-Kurdish BDP played a big part in denying the AK's advance.
"Our people want the Kurdish issue to be solved through peaceful and democratic methods. We will work for it, and will struggle to meet the demands of Kurdish people with the new constitution," Serafettin Elci, a prospective Kurdish MP for the southeastern city of Diyarbakir, told Reuters.
"This is a huge success for us. We expect the PM to signal a strong hope for the solution of the Kurdish problem for Turkey's future."
Erdogan's support has been built on his success in creating a booming economy and in ending decades of chaotic coalitions, military coups and failed international financial bailouts.
The only doubt hanging over Sunday's vote had been over the margin of Erdogan's victory, given aims for a new constitution.
There has been speculation that Erdogan will seek to move Turkey toward a more presidential system of government, with an ultimate aim of becoming president himself.
Erdogan, whose party evolved from banned Islamist movements, says the new charter will be based on democratic and pluralistic principles that will bring Turkey closer to EU standards.
Turkey and the Erdogan's AK are often cited as models for supporters of democracy living through the "Arab Spring" in parts of the Middle East and North Africa.
While foreign investors traditionally have seen AK as the most market-friendly party, Erdogan's critics say he has an authoritarian streak.
Opponents point to rampant use of wiretaps by state agencies, the detention of journalists critical of the government, nepotism and a widening gap between rich and poor.
Analysts have warned the new government will face sobering economic challenges. The current account deficit is ballooning, fiscal policy needs tightening to cool overheating and youth unemployment is high in a country where the average age is 28.
(Additional reporting by Simon Cameron-Moore and Ece Toksabay in Istanbul and Ibon Villelabeitia and Tulay Karadeniz in Ankara; Editing by Sonya Hepinstall)
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