SVE NEWS & CNBC Sharing Series – Turkey’s economy is in trouble as experts worry it could become a new coronavirus hotspot

GP: Coronavirus precautions in Turkey 200313

Municipal officials carry out disinfection works as a precaution against the coronavirus (COVID-19) at historical mosques and churches in Mardin, Turkey on March 13, 2020. Halil Ibrahim Sincar | Anadolu Agency via Getty Images

Turkey is on shaky ground and its currency depreciating as controversial monetary moves and fast-rising coronavirus cases threaten to plunge an already fragile economy into much more danger.

The country of 82 million is one of the few in Europe that hasn’t implemented a mandatory nationwide lockdown, something its president Recep Tayyip Erdogan has so far avoided in hopes of shielding the economy. But after nearly two years of a weakening currency, high debt, dwindling foreign reserves and growing unemployment, Turkey is in a particularly bad place to weather a pandemic, experts say.

“There will be hard times ahead, because Turkey was already at a macroeconomically vulnerable position before the coronavirus hit,” Can Selcuki, managing director of Istanbul Economics Research, told CNBC on Monday, following a temporary 48-hour lockdown of Istanbul and 30 other cities. While self-isolation is currently voluntary in Turkey, he said, most non-essential businesses had closed and tourism had evaporated.

“Unemployment in January was already 14% and it will probably increase greatly due to the foreclosures because of the coronavirus,” he said.

Turkey began registering more than 3,000 new coronavirus cases per day after April 4 and has reported more than 4,000 per day since April 8, a sudden surge that’s alarmed health experts. The country confirmed its first case on March 11 after insisting it had no cases for more than two months as the virus spread in its neighboring countries.

Cases are now at more than 65,000 — the ninth-highest globally, after Iran — with at least 1,400 deaths.

Chart: Turkey coronavirus cases 200415 Asia

Erdogan claims his government has dealt with the virus better than any other country. But concerned calls from medical associations in Turkey demanding government transparency and support in the fight against coronavirus have grown louder as the spike in cases draws warnings it could become the next Italy or Spain.

“It is evident that hospitals in the city have not prepared adequately in the two and a half months since this deadly virus first came into the spotlight,” the Istanbul Chamber of Physicians said in a statement in early April.

Erdogan on Monday announced tens of billions of lira worth of funding for businesses hit by the virus, as well as unemployment support and large-scale postponement of debt and mortgage payments. New hospitals are being built in Istanbul and on airport grounds, and nearly half a million tests had been carried out, he said.

A new weekend curfew will take place beginning April 17 and may continue for successive weekends, the president said, after the abrupt announcement of last weekend’s 48-hour lockdown on Friday sent hundreds of thousands of people rushing into crowded grocery stores, flouting social distancing guidelines.

Falling currency reserves and spooked investors

Recent moves by Erdogan’s administration have spooked investors — Turkey on Monday restricted foreigners’ ability to trade the lira in the offshore swaps market, sending the currency falling the furthest among emerging markets for the day.

And analysts expect the lira to fall yet further in value. Already hit by the country’s currency crisis in 2018 and 2019, this year has seen the dollar gain 13% on the Turkish note, which was trading at 6.796 to the greenback on Tuesday afternoon Istanbul time compared to 5.946 at the start of the year. Japanese bank MUFG forecasts the lira falling to 7 per dollar by the end of the quarter.

Gross foreign currency reserves have fallen rapidly in recent months to their lowest level since 2009 largely due to Turkey’s Central Bank, the CBRT, selling dollars to artificially prop up the lira. Turkey’s foreign reserves, excluding gold, amounted to $77.4 billion at the end of February, according to the IMF; its financing requirements for 2020, by contrast, are estimated at $170 billion.

“If any country experiences a sovereign debt crisis, there are risks that there might be a contagion effect to emerging markets,” Agathe Demarais,  global forecasting director at the Economist Intelligence Unit, told CNBC. “That Turkey has large external financing needs, and a private sector that is highly indebted in foreign currency, compounds these risks.”

The EIU expects a full-year recession in Turkey, whose “large tourism sector will collapse, which will fuel pressure on the twin deficits and on the already fragile lira” which will in turn fuel inflation, Demarais warned.

An IMF rescue? No way, says Erdogan

The lira also fell after Erdogan loudly refuted any acceptance of support from the IMF, which economists say the country direly needs.

“Turkey doesn’t have the types of resources it did 10 years ago to compensate for the economic collapse of the coronavirus,” Selcuki said. “Turkey is going to need any kind of resources it can get its hands on.”

The rejection of the IMF is political for Erdogan, many analysts say, but they describe it as economically unsound.

“Idiotic to rule out cooperation with the IMF when the CBRT is bleeding scarce FX reserves,” Timothy Ash, senior emerging markets strategist at Bluebay Asset Management, said in an emailed note. Erdogan said Monday in an address to the nation that Turkey “will not bow down to the IMF program, or any imposition that would indebt our country.”

RT: Recep Tayyip Erdogan, 191107

Turkish President Recep Tayyip Erdogan attends a news conference in Budapest, Hungary, November 7, 2019. Bernadett Szabo | Reuters

Demarais described Erdogan’s move as “a bravado meant to help the country save face, but foreign investors will not be impressed.”

Options like a credit line from the U.S. Federal Reserve are uncertain and capital controls would be disastrous, the analysts agreed. Without external help, and with looming mass unemployment, high financing needs and a health crisis, Turkey may be quickly running out of options.

“Given the current pace of CBRT reserve depletion, time is fast running out for the CBRT, the lira and Erdogan in terms of economic policy choices,” Ash said.



Sources from: CNBC

SVE NEWS is the leader in world news liberal sharing.

(Comments on this news are welcome)

2020 CWMALLS: Standard, Sharing,Ecology, Value;
2020 CWMALLS COMMODITY: Patent, Technology, Art, Intelligence;
2020 CWMALLS NEW SPECIES: Keen, Aggressive, Personality, Value;
2020 MWE FUND: Charity, Public Welfare, Responsibility;

Tips: More wonderful contents, please pay attention to “Instagram: @cwmalls “. From now on, WWW.CWMALLS.COM officially provides Custom Made Leather Jackets Series, Made to Order Leather Shoes Series, ODM Leather Bags Series around the world; whether for men’s style or women’s style, Whether it is Haute Couture, or prop clothing, performing costumes, professional clothing, special clothing, advanced customization, we can meet all your requirements; please pay attention and experience! Meanwhile, CWMALLS® Patented Product Series is also provided with Custom Made, Personal Tailor services, and appreciated and interacted synchronously via Google, Bing, FacebookTwitterInstagram,YouTube, Pinterest , LinkedInVK   and other sharing platforms; welcome worldwide web celebrities, fashion icons, opinion leaders, columnists and other friends, partners to comprehend and cooperate actively! Thank you! In 2020 CWMALLS people, CWMALLS team, CWMALLS complex will bring you more surprises and values!

58 thoughts on “SVE NEWS & CNBC Sharing Series – Turkey’s economy is in trouble as experts worry it could become a new coronavirus hotspot”

  1. Like!! I blog quite often and I genuinely thank you for your information. The article has truly peaked my interest.

  2. I learn something new and challenging on blogs I stumbleupon everyday.

  3. Keithadony says:

    Kudos! Good stuff. cialis

  4. Ashanti says:

    Hi, very nice website, cheers!
    Need cheap and reliable hosting? Our shared plans start at $10 for an year and VPS plans for $6/Mo.
    Check here:

  5. cbd oil says:

    Thanks for sharing

  6. i bookmared your site

  7. You actually make it appear really easy along with your presentation but I in finding this matter to be actually something which I think I would by no means understand. It seems too complicated and extremely vast for me. I’m looking forward on your next publish, I will attempt to get the hold of it!|

  8. sanal ofis says:

    Nice to read will follow again.

  9. Very nice to read and follow again. Hope to read more about this.

  10. Wow that was strange. I just wrote an incredibly long comment but after I clicked submit my comment didn’t appear. Grrrr… well I’m not writing all that over again. Anyways, just wanted to say superb blog!|

  11. Awesome! Its really remarkable piece of writing, I have got much clear idea on the topic of from this post.|

  12. Hello there! Would you mind if I share your blog with my facebook group? There’s a lot of people that I think would really enjoy your content. Please let me know. Thank you|

  13. parc rampai says:

    Hello, after reading this remarkable post i am too happy to share my experience here with colleagues.|

  14. Hi there, simply became aware of your weblog thru Google, and found that it is really informative. I’m going to watch out for brussels. I will appreciate if you happen to proceed this in future. Lots of other people will probably be benefited out of your writing. Cheers!|

  15. This excellent website really has all the info I wanted concerning this subject and didn’t know who to ask. |

  16. Thanks , I’ve just been searching for information about this subject for ages and yours is the greatest I have discovered so far. However, what about the conclusion? Are you certain in regards to the source?|

  17. homepage says:

    What a data of un-ambiguity and preserveness of precious experience on the topic of unpredicted emotions.|

  18. At this time it looks like WordPress is the best blogging platform available right now. (from what I’ve read) Is that what you’re using on your blog?|

  19. Heya i’m for the first time here. I found this board and I in finding It truly useful & it helped me out a lot. I’m hoping to give one thing back and aid others such as you aided me.|

  20. LivePorn says:

    Hurrah! In the end I got a blog from where I be capable of really obtain valuable facts regarding my study and knowledge.|

  21. Wow, fantastic weblog layout! How long have you ever been blogging for? you make running a blog look easy. The total glance of your website is great, as well as the content material!

  22. I think this is one of the most important info for me. And i’m glad reading your article. But want to remark on some general things, The site style is wonderful, the articles is really excellent : D. Good job, cheers|

  23. xxx says:

    An intriguing discussion is worth comment. I believe that you should publish more about this topic, it may not be a taboo matter but generally people do not speak about these subjects. To the next! Best wishes!!|

  24. Best CBD Oil says:

    May I simply say what a comfort to find a person that actually knows what they are discussing on the web. You certainly realize how to bring a problem to light and make it important. A lot more people have to look at this and understand this side of the story. It’s surprising you aren’t more popular given that you surely possess the gift.|

  25. Thanks for fantastic info I was looking for this info for my mission.

  26. SMS says:

    Very good article! We are linking to this particularly great content on our site. Keep up the great writing.

  27. g only says:

    I every time spent my half an hour to read this blog’s posts every day along
    with a mug of coffee.

  28. Awesome site you have here but I was wondering if you knew of any discussion boards that
    cover the same topics talked about in this article?
    I’d really love to be a part of online community where I can get responses from other knowledgeable individuals that share the
    same interest. If you have any recommendations, please let me know.
    Bless you!

  29. kayak says:

    Great info. Lucky me I recently found your blog by chance (stumbleupon).
    I have bookmarked it for later!

  30. Hello! This post couldn’t be written any better!
    Reading this post reminds me of my old room mate! He always kept talking about this.

    I will forward this article to him. Pretty sure he will have a good read.

    Many thanks for sharing!

  31. Pingback:

Comments are closed.