Turkey's economy shrank by 9.9 percent between April and June compared to the same period last year, Turkish Statistical Institute (TÜİK) reported on Aug. 31. While less precipitous than expected, the drop in gross domestic product (GDP) was still historic compared to the first quarter at a seasonally and calendar-adjusted 11.0 percent, according to TÜİK.
Turkey's banking authority lowered the mandated loan-to-assets ratio for deposit banks to 95 percent, formerly 100 percent. The relaxing of the stimulation policy follows record devaluation of the Turkish Lira against the dollar.
The recent economic package that was prepared by the Turkish government with the contribution of employer associations is based on the assumption that the “social distancing” measures won’t last very long. Is that realistic? Possibly, but upon consideration of the extent of the pandemic and the speed at which it is spread, it seems unlikely.