Economy
Turkey’s foreign trade deficit increased by 180 percent within the past year, as COVID-19 prevention measures decreased exports dramatically, with imports remaining stable. The ratio of exports to imports dropped by nearly 20 percent in the past year.
One out of every four workers in Istanbul has become unemployed due to the coronavirus, according to a report of the main opposition CHP. Some 66.2 percent of the workers in the megacity have also experienced a decline in their wages, the CHP said, basing its report on surveys and field works.
Turkey is in dire need of a source of external funding granted through a credible international institution in order to combat the economic impact of the coronavirus, according to a research of five Turkish economists. The study said that although a swap agreement with the U.S. Federal Reserve as well as the IMF could help Ankara to battle the crisis, the arrangement of a swap line alone would likely be insufficient.
The Turkish Central Bank revised its year-end inflation forecast to 7.4% for 2020, down from 8.2%. In an online presentation on April 30, Governor Murat Uysal said the coronavirus pandemic brought on "extraordinary circumstances" in which temporary volatility was expected in the bank's financial buffer.
According to a recent report by a union of public employees, inflation levels for basic consumer goods in Turkey has reached 29.1 percent compared to last year. Fruit prices have surged by 80.6 percent, while the prices of dairy products and eggs have climbed by 27.6 percent since April 2019.
Turkey will be using an intricate method of customs inspections that will delay imports, in an attempt to decrease the country’s foreign trade deficit. As exports have dropped significantly during the COVID-19 outbreak, Turkey’s import costs have opened a large budget deficit.
Turkey’s biggest trade union confederation Türk-İş has calculated the hunger threshold – which indicates the minimum amount of money needed to save a four-member family from starvation a month – as 2,374 liras ($340). On the other hand, workers who have been put on unpaid leave due to the coronavirus outbreak are receiving an emergency state aid of 39 liras per day, corresponding to 1,177 liras a month.
Turkey's Central Bank on April 22 cut its benchmark interest rate by a percentage point to 8.75 percent in order to shore up an economy hit hard by the coronavirus outbreak. The bank’s policy committee said in a statement that fallout from the coronavirus outbreak has started to hit trade, tourism and domestic demand so it was “crucial” to ensure markets are functioning and credit is flowing.
Turkish economy will see a contraction of 1.4 percent in 2020, with drops in the second and third quarters of 8.6 percent and 5.3 percent respectively, according to a Reuters poll. “We think that all sectors of the economy will be affected by COVID and we assume that most of the negative impact would concentrate on Q2-Q3 2020,” economists said.
DEVA Party leader Ali Babacan has said that Turkey shouldn't rule out borrowing loans from the international institutions, saying that it should choose cheap IMF loans over high-cost borrowing from markets. "Turkey has the right to use them with unconditional 1 percent interest. Instead of going to the markets and paying 7 percent, we can get loans from these institutions with 1 percent," he said.
The Economic Policy Research Foundation of Turkey (TEPAV) predicted that the country’s economy would shrink by 40 percent if the COVID-19 outbreak were to last a year. While the tourism, culture and entertainment industries would suffer the most, government expenditure is projected to grow by 20 percent.
Uğur Gürses writes: According to the International Monetary Fund's (IMF) World Economic Outlook report, a worldwide recession of 3 percent is anticipated for 2020, while Turkey's economy is expected to shrink by 5 percent this year. Given that the IMF's forecasts are always somewhere between “moderate” and “cautious,” realistic expectations are likely to result in a more negative picture.
Turkey's current account balance of payment registered a deficit of $1.23 billion in February, 10 times higher compared to February 2019, according to figures released by the Central Bank.
Gold prices spiked April 13 as one gram of gold was priced at 367 Turkish Lira at the start of the day, and one ounce of gold was priced at 1686 lira.
Turkey has held talks with the United States about possibly securing a swap line from the Federal Reserve and has discussed other funding options to mitigate fallout from the coronavirus outbreak, anonymous Turkish officials told Reuters on April 10. “Aside from the IMF, Turkey is looking at every kind of option for resources and is involved in various contacts,” one of the Turkish officials said.
Editor's Picks
Musa Özuğurlu writes: Russia, by any means, wishes to see al-Assad in power at least for another term. It is trying quite unattainable formulas to make it possible for Muslim Brotherhood to return to Damascus after so many years. Let us see whether or not these attempts will bring the political transition and thus relief to Syria?
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In this edition of Turkey: The Long View, Duvar English columnist Luke Frostick is joined by the president of P.E.N. Turkey, an international organization dedicated to protecting the rights of writers around the world.
Politics
Germany will keep reviewing travel advice for Turkey, Foreign Minister Heiko Maas told his Turkish counterpart Mevlüt Çavuşoğlu on July 2, saying any decisions were coordinated with the EU and based on reliable data on infections and the health situation. Earlier, Turkey said that it is disappointed by the European Union's decision to exclude it from the list of countries recommended for non-essential travel.
Turkey's flagship carrier is planning to cut pilots' wages in half, lowering other paychecks and possibly restructure their payment scheme, a union representative told Bloomberg. Turkish Airlines paused commercial flights for about three months during the pandemic.
Turkey is remembering victims of the Sivas Massacre, which took place when a large group of radical Islamists set the Madımak Hotel in the Central Anatolian province of Sivas on fire on July 2, 1993, killing 33 intellectuals and two hotel personnel, on 27th anniversary. Also on July 2, a parliamentary inquiry to reveal the perpetrators of the Sivas Massacre was rejected by lawmakers of the AKP, MHP and the İYİ Party.
A Turkish court on July 2 heard a case about converting Istanbul's sixth century Hagia Sophia back into a mosque and will announce its verdict within 15 days, a lawyer said, on an issue which has drawn international expressions of concern. Greece said Turkey risked opening up "a huge emotional chasm" with Christian countries if it pressed ahead with the proposal to convert Hagia Sophia into a mosque.
Turkey has carried out the largest anti-narcotics operation in its history, Interior Minister Süleyman Soylu said on June 30, adding that it was conducted in cooperation with nine countries. "Traffic worth 500 million liras was prevented. It was the biggest operation in Turkey's history in terms of preventing income from drugs and crime," Soylu said.
Austria pledged on June 29 to find out who was behind clashes between Kurdish and Turkish protesters in the Austrian capital last week. "Austria's ambassador to Ankara will be invited to our ministry and informed of our concern," the Turkish Foreign Ministry said, accusing Austrian security forces of meting out "harsh" treatment to the Turkish protesters.
Turkey shut down a total of 119 media outlets following the July 15, 2016 failed coup attempt, Vice President Fuat Oktay said in response to a parliamentary question submitted by Peoples' Democratic Party (HDP) deputy Muazzez Orhan. A total of 53 newspapers, 20 magazines, 16 TV channels, 24 radio stations and six news agencies were shut down with state of emergency decrees.
A lawyer from Van Bar Association Migration and Asylum Commission said that the death toll in the migrant boat accident in Lake Van is unknown. "Unfortunately we don't have enough information about the boat that sank in Van Lake over the weekend. The Van Bar Association hasn't received a public defender request for the boat yet."
Turkish authorities arrested one person and detained 11 others for insulting Treasury and Finance Minister Berat Albayrak's family through their social media posts, state-run Anadolu Agency said on July 1. The suspects face charges of "insulting a public official," the agency said.
The Dutch Minister of Infrastructure Cora van Nieuwenhuizen has called on citizens of Turkish descent not to visit Turkey unless it is "mandatory," saying holidays or family visits are not essential. "Going to a country on the orange list is irresponsible and is an anti-social behavior," Nieuwenhuizen said. Netherlands’ coronavirus travel advice for Turkey currently stands at ‘orange’: travel only if absolutely essential.
The Turkish Competition Authority has launched a probe into German automotive giants Audi, Porsche, Volkswagen, Mercedes-Benz and BMW. The authority's announcement on July 1 came as Volkswagen AG canceled plans to build a car factory in Turkey after the coronavirus pandemic jolted auto markets.
Russian President Vladimir Putin told his counterparts from Turkey and Iran on July 1 that there was a need for peaceful dialogue between the opposing forces in Syrian war. "An inclusive inter-Syrian dialogue should be actively promoted within the framework of the constitutional committee in Geneva. I propose to support this process, to help the participants to meet and start a direct dialogue," Putin said.
Turkey's media watchdog issued a five-day blackout to two news broadcasters that are critical of the government. Both broadcasters will lose their licenses if they receive another broadcast interruption fine.
Turkish Deputy Parliament Speaker and main opposition Republican People's Party (CHP) deputy Levent Gök broke a world record on running the longest uninterrupted session in a national parliament with eight hours and 13 minutes.
Turkey's ambassador to France İsmail Hakkı Musa said on July 1 that Paris had informed NATO it was suspending its involvement in a naval operation in the Mediterranean after a probe into an incident between French and Turkish warships did not back Paris' claims. "I had the information yesterday, it seems that the Courbet is withdrawing from this NATO exercise," he said.
The wife of an inmate diagnosed with cancer and coronavirus has urged the ruling Justice and Development Party (AKP) to release her husband. "This means he has been abandoned to die. I am calling upon the public, the Presidency, and the Ministry of Health: Release my husband right away. There are thousands of [coronavirus] patients in jail, their voices must be heard. People are coming face to face with death at the moment,” she said.
A new testing center in Istanbul Airport will offer all passengers COVID-19 tests for 110 Turkish Liras each (about $16). The center's capacity is an hourly 2,000.
Professor Haluk Savaş who was known for his resistance against Ankara's state of emergency decrees died on June 30. Savaş had been removed from his post at a university with a state of emergency decree and was refused a passport to travel abroad for cancer treatment.
Germany's Federal Constitutional Court has ruled that it was unconstitutional for police to remove posters of the Syrian Kurdish People's Protection Units (YPG) that Left Party deputy Michel Brandt hung in his office prior to a visit to the Bundestag by President Recep Tayyip Erdoğan in 2018.
Turkish President Recep Tayyip Erdoğan signed off on a new university because of a mistake in an executive order, which then got published in the official gazette. The gazette published a correction the next day, saying the correct word was "faculty" and not "university."
The United States will continue working with Turkish companies producing some parts of F-35 fighter jets until 2022, Turkey's state-owned Anadolu agency quoted a Pentagon spokeswoman as saying on July 1. "Our industry partners will carry out the continuing contracts," she said, adding the Pentagon was still looking for alternatives to Turkey.
Economy
Positive developments in COVID-19 vaccine studies have stopped the steady increase in gold prices. Pharmaceutical giant Pfizer said on July 1 that their vaccines were effective in increasing recipients' antibodies.
New regulation concerning online and digital banking services will ban bank representatives from asking about users' ID information to confirm their identities. Representatives will instead be asking about digital ID informations and PIN numbers.
Turkey's Trade Ministry legalized 18 installments for touristic spending to incentivize consumers. The new legal installment limit will be applicable to travel agencies, airlines and hotels.
Broadly defined unemployment in Turkey has reached 39 percent according to the Confederation of Progressive Trade Unions of Turkey (DİSK). The union disputed recently revealed official unemployment rate of 13.2 percent. DİSK claimed that only those looking for a job for a period of four weeks as unemployed were reflected in the official numbers.
Turkish Treasury and Finance Minister Berat Albayrak has announced that the Central Bank will provide a credit of up to 400 million Turkish liras ($59 million) with a maximum maturity of 10 years to companies which support exports and reduce imports.
Urban Beat
The United States' National Aeronautics and Space Administration (NASA) likened railroads and highways in Turkey's capital Ankara to arteries in an eagle-eye shot of the city at night, dubbed "photo of the day" on June 28.
Istanbul Mayor Ekrem İmamoğlu on June 25 announced that the municipality purchased a portrait of Ottoman Sultan Mehmet II at a London auction. According to the London-based world-famous Christie's auction house, the municipality's winning bid amounted to £770,000 ($955,000) for the oil painting, which is believed to be the work of Italian painter Gentile Bellini in 1480.
Turkey's Culture and Tourism Ministry will be turning the iconic Galata Tower into a museum. The ministry will also launch a "culture route" that spans from the tower, along Istiklal Avenue and to Taksim Square. Minister Ersoy also said that the construction of the AKM would be completed within a month, ongoing since February 2019.
Turkey's first mass event after the COVID-19 pandemic brought together 50 ambassadors and their families, press and businessmen together in Mediterranean Antalya's Aspendos Theater. The concert was performed by Turkey's seven tenors, accompanied by the Antalya Opera and Ballet's orchestra.
Istanbul's 28th LGBTI+ Pride week started on June 22 with a week-long schedule, entirely planned online. After having been banned for the past five years, the Pride march will also be carried out digitally this year. The theme of the Pride week is "Where am I?" focusing on safe spaces for queers during the COVID-19 pandemic and immigration.