Turkey's Central Bank provided more stimulus for the financial sector and economy on March 31, saying it would ramp up government debt buying and offer new pools of cheap funding to stem the fallout from a growing coronavirus outbreak. The Central Bank also extended 60 billion lira ($9 billion) worth of rediscount credits and added more lending options well below its 9.75% policy rate. It said the moves would provide much needed credit to companies and liquidity to government debt markets.
In the second episode of ‘Zeitgeist Turkey’, Duvar English’s Cansu Çamlıbel and pollster Can Selçuki talk about the the shortfalls of the economic shield package of the government and survival mode in Turkish society set off by the coronavirus outbreak. They also discuss the political implications of sudden removal of the Transport Minister from his post following mounting criticism for holding the first tender for controversial Kanal Istanbul project last week.
Turkey's economic confidence index fell 5.9% month-on-month in March to 91.8 points, data from the Turkish Statistical Institute (TÜİK) showed on March 27, marking a downturn after five straight months of gains. The confidence in real sector deteriorated the most, going down 7.6%.
Moody's revised its growth forecasts downward for 2020 amid the coronavirus pandemic. "We expect Turkey’s [B1 negative] economy to be hit the hardest, with a cumulative contraction in second- and third quarter GDP of about 7.0%. The shock will likely take a large toll on Turkey’s tourism-related sectors through the summer," it said in its Global Macro Outlook 2020-21.
Turkey has suspended tax payments for millions of people in the country, Treasury and Finance Minister Berat Albayrak said on March 24. "We have identified business sectors which fall under force majeure provisions," he said, adding that some 1.9 million taxpayers, who have income from agriculture and commence or who are self-employed, will also benefit from force majeure provisions.
Selva Demiralp writes: Things are different in Turkey. We could hardly reach the inflation target even at the most favorable times and gave in to populist policies. Thus, mismanaged debt monetization can lead us all the way to hyperinflation. The way to prevent inflation is to drain the money effectively just as demand starts to pick up.
Turkish President Recep Tayyip Erdoğan issued a decree on March 20 postponing all events related to science, culture and art, as it seeks to contain a surge in coronavirus (COVID-19) cases. The decree published in the Official Gazette said all meetings and activities, indoors or outdoors, related to science, culture, art and other similar fields would be postponed until the end of April.
Treasury and Finance Minister Berat Albayrak said on March 19 that uncertainty about the global supply chain generated by the pandemic represented an opportunity for Turkey. He also said that he had "no concerns" about Turkey's ability to meet its economic growth, budget and inflation targets for 2020 despite expectations of a potentially severe global recession due to the coronavirus.
President Recep Tayyip Erdoğan has said that the financial developments that take place in relation to the decrease in oil prices will provide additional advantages to Turkey. Speaking during a high-level coronavirus meeting, Erdoğan said that Turkey is in a much better situation than Britain, France and Germany.
The unemployment rate among Turkey's young population, ages 15 to 24, has surged to 25 percent in December of 2019, higher than the past six years' rates, the Turkish Statistical Institute (TÜİK) revealed March 10. The average unemployment rate has also risen from 2018 to reach 13.7 percent.
Turkey's Trade Ministry has placed protective medical gear like masks, bodysuits and gloves, on the list of items that need ministry pre-approval for being sold abroad, the official gazette said on Mar. 4. The export regulation comes amid a worldwide coronavirus outbreak that increased the global demand for such goods.
Turkey's most recent increase of its special consumption tax on gas and diesel fuel will bring an estimated five billion Turkish Liras of annual income. With a 0,18 TL/litre increase on the tax, it is now 2,52 TL/litre for gas and 2,05 TL/litre for diesel fuel.
The gold and dollar exchange rates in Turkey surged to record highs Feb. 24, dropping again on Feb. 25 after markets opened and traders started to sell. Dollar prices rose as high as 6.16 TL during the day, marking a new high for the last 9 months. The price of 1 ounce of gold reached $1,688, and the price of one gram of gold reached a record price of 334 TL.
Borsa Istanbul will remove two zeros from its indices on April 27, it said on Feb. 19. The stock exchange will test this move in several phases. "Planned go live date is April 27, 2020 and the index values will continue to be shown in two decimal places. Contract sizes will be decreased to 10 from 100. Price ticks for futures will be increased to 0.25 from 0.025," it noted.
Turkey's Competition Board has ultimately fined tech giant Google 98.3 million Turkish liras for violating the terms of fair competition due to unfair access to advertisement space. Last March, the board opened an investigation into claims that Google uses abusive tactics to quash its rivals.