Drop in popularity

"We will study the results closely and ... see why we have ended in this position," he said.

The Republican People's Party, Turkey's secularist main opposition, came second in the poll with 23.2 per cent of the vote, followed by the Nationalist Action Party with 16.1 per cent.

Economy in turmoil

 Turkish exports have fallen dramatically since this time last year – down 35 per cent.

As factories close, industrial output has plummeted by 21 per cent.

 The value of the Turkish lira is down 26 per cent.

 Unemployment in the nation of 71 million people has soared to a four-year-high, at 13.6 per cent.

 Turkey's budget deficit has soared to $4.4bn.

The drop in the ruling party's popularity comes against a backdrop of record unemployment and a worsening economy in the country.

Erdogan aggressively campaigned across Turkey for weeks, particularly in the southeast, aiming for a win that would bring a shift in a region marred by separatist violence that has weighed heavily on the country's economic and political development.

He had said on Friday that he would consider it a failure if his party received less votes than the 47 per cent it won last year.

The party was unable to win the city of Diyarbakir, the largest city in the Kurdish southeast, and several other key cities, including Izmir.

The secularist opposition also made inroads in Istanbul, Turkey's largest city, and in the capital Ankara.

Economic factors

About 48 million people were eligible to vote in the polls in 81 provinces.

Turkey's once booming economy has been severely hit by the global economic crisis.

Unemployment stands at 13.6 per cent and the economy is expected to go into recession in 2009 after years of unprecedented growth.

The International Monetary Fund and Turkey have been in talks for months on a deal said to be aimed at protecting the $750bn economy from the financial crisis and Erdogan is expected to complete those talks after Sunday's vote.

At least five people were killed and 93 were wounded in election-related violence in the southeast of Turkey, the state news agency Anatolian said on Sunday. Nearly 100 people were injured.

Al Jazeera's Anita McNaught, reporting from Istanbul, said there were tensions ahead of the vote, particularly in the southeast, but the fighting was very localised, and not party-related.