Virus threatens fragile Turkish economy

Ankara, March 31 (AFP/APP): The Turkish economy was healing after a recession when the new coronavirus struck, leaving Ankara scrambling to contain the damage with stimulus measures worth billions and facing demands to do much more.

The death toll in Turkey is 168 with 10,827 recorded cases of the virus but the fear is that the situation could get much worse.

President Recep Tayyip Erdogan announced earlier this month a $15 billion package to support the economy, with tax cuts for businesses and measures to help low-income households.

While business leaders and analysts agreed Ankara’s measures would benefit companies, experts warned of higher unemployment and lower growth.

They also pointed to the possibly devastating impact on tourism which employs hundreds of thousands of people.

The concern is that before the outbreak, the economy was growing only tentatively after a currency crisis in 2018.

Moody’s rating agency said among the G20, it expected Turkey “to be hit the hardest, with a cumulative contraction in second- and third-quarter GDP of about 7.0 percent” in 2020.

But as recently as March 19, Finance Minister Berat Albayrak said he did “not see any risks to the economy for now” and was still aiming to meet the ambitious target of five percent growth for 2020.

“The shock will likely take a large toll on tourism-related sectors through the summer,” Moody’s added.

Last year, tourism income rose 17 percent to $34.5 billion while the number of visitors increased by nearly 14 percent to about 52 million.

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