'Over 47,000 shopkeepers went bankrupt in first half of 2021 in Turkey'

Main opposition CHP vice chair Veli Ağbaba said on July 26 that over 47,000 shopkeepers went bankrupt in the first half of 2021 in Turkey, displaying the extent of economic and social problems in the country.

Tuesday July 27 2021 11:47 am

This file photo shows Istanbul's famous Grand Bazaar.

Duvar English

A total of 47,572 shopkeepers went bankrupt in the first six months of 2021 in Turkey, said main opposition Republican People's Party (CHP) vice chair Veli Ağbaba in a written statement on July 26, according to a report by online news outlet Bianet.

Citing the data of the Turkish Trade Registry Gazette, Ağbaba said that the number of shopkeepers who went bankrupt in May was 3,893, whereas the figure increased by 94 percent in June, reaching to 7,568.

The number of companies that closed down in May was 556 in May, whereas it marked an increase of 116 percent in June, reaching to 1,226, Ağbaba said.

Citing the data of the Turkish Banking Regulation and Supervision Agency (BDDK), Ağbaba said that 84 out of every 100 small and medium-sized enterprises (SME) in Turkey owe debts to banks. The amount of debts owed by SMEs have reached approximately 950 billion Turkish Liras ($110 billion), the deputy said.

The financial volatility and uncertainty, coupled with increasing bankruptcies, will result in "mass unemployment,” Ağbaba said.

“The high interest rates on credits, increasing foreign exchange rates and uncertainties in economy cause mass bankruptcies of companies in Turkey. The probability that both shopkeepers and SMEs will continue to bankrupt at an accelerating rate in the future, will cause an increase in mass unemployment,” he said.

Turkey's pandemic-era ban on layoffs and a government wage support system, both adopted in early 2020, expired in July, setting the stage for a rise in unemployment.

Both measures aimed to support businesses and registered employees during the COVID-19 pandemic while keeping a lid on the jobless rate.

Economists say the lifting of the layoff ban will likely lead to a sharp rise in the number of unemployed as businesses, hard hit by virus-curbing measures, struggle to keep employees.