The $819 billion economy-sized country, Turkey, is expected to experience an economic slow down following the earthquake that has disrupted its activities.
The quakes which were nine hours apart on Monday have on Friday recorded about 22000 deaths. This was reported to be one of the deadliest earthquakes on earth.
It has affected almost all sectors of the economy such as schools, hospitals, and residential apartments.
About 6000 buildings collapsed in the course of the quake.
Turkey’s economy holds the 19th position in the current World Data ranking of large economies.
It may be categorized as the 55th richest country considering the purchasing power per inhabitant.
Prior to this time, the country has been battling with economic decline which is owing to the hike in the price of energy globally.
The economy was also affected by Covid-19, the Russian-Ukraine, and the low-interest policy imposed by the president of Turkey, Recep Tayyip Erdoğan, amid rising inflation.
A report by Bloomberg stated that analysts tried to estimate the impact of the settling earthquake impact on Turkey.
The head of product at Medley Global Advisors in New York, Nick Stadtmiller stated, “The costs of this disaster strike the Turkish economy at a time when sentiment was already fragile.”
Nick added that It also “increases the risk of another market meltdown given the pre-existing vulnerabilities in the currency and external account.”
The earthquake will result in massive changes in the economy. The Turkish government will spend more through giving relief funds to affect families.
Also, they will rebuild the over 6000 buildings that collapsed according to the Turkish president when he visited the affected areas.
According to Bloomberg economist Selva Bahar Braziki, “We make an initial rough estimate that public spending on Monday’s quakes may be equivalent to 5.5% of GDP.
” A likely government-backed credit scheme could result in a higher number.”
He said that unplanned spending caused by the quake may surpass the year’s budget. There will be breakage of budget, he added.