The devastating earthquakes in Turkey caused great damage to the country’s economy. According to Bloomberg, the damage is estimated at $84 billion, which is about 10% of GDP. How real are these figures and whether the Turkish economy is in danger of a powerful collapse, Izvestia investigated.
“It will take several months to determine the economic impact, given the unknown direct and indirect losses from the earthquake. In the short term, the country will need emergency fiscal and monetary policy measures, as well as international support,” said Simon Quijano-Evans, chief economist at Gemcorp Capital Management.
A private investor, the founder of the School of Practical Investing, Fyodor Sidorov, in an interview with Izvestia, said that so far, Bloomberg estimates are significantly higher than the figures that other media have repeatedly called.
At the same time, one should not forget that Turkey was already in a state of crisis – hyperinflation (up to 80% per year), devaluation of the national currency, an increase in the budget deficit, an increase in unemployment, the expert explained. He added that the earthquakes did not affect the most economically developed provinces and territories, which developed mainly due to tourism.
There are two estimates of the damage to the Turkish economy after the earthquakes, believes Aleksey Fedorov, a leading economist at the TeleTrade information and analytical center. According to the US Geological Survey, the losses will amount to 2% of GDP, or about $17–20 billion.
“The figure of 4.5–5.5% of losses from Turkey’s GDP looks more realistic, that is, it is about $40–45 billion,” the economist said.
Read more in the exclusive Izvestia article:
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p class=”MsoNoSpacing”>Trouble has come: earthquakes in Turkey threaten to collapse the economy
