Douglas Winslow from Fitch said that Turkey's economy will catch up with its sustainable trend of growth next year. "In the first quarter of this year economic growth had accelerated to above 6%. We now anticipate a very sharp contraction in the second quarter, flatter growth in the third quarter and then recovery in the fourth quarter, as activities begin to normalize after the partial lockdown," he said.
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.
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%.
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.
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.
International credit rating giant Moody's warned Turkey that negative real interest rates could hurt the Turkish Central Bank's credibility and lower investors' trust. The practice of having interest rates on loans that are lower than the inflation rate, negative real interest rates make Turkey more hazardous rather than risk-averse for investors, Moody's added.
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.
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.
Main opposition Republican People's Party (CHP) deputy leader Aykut Erdoğdu said that 8.6 people commit suicide on average everyday in Turkey mostly due to financial reasons. "The government is responsible if people commit suicide because their children are hungry or because they are unemployed," Erdoğdu said, as he accused the government of blessing death.
Turkey's current account balance posted a deficit of $2.8 billion in December 2019, the Turkish Central Bank said on Feb. 14. Official data showed that the figure widened by $1.7 billion from same month the previous year.
Turkey's Banking Regulation and Supervision Agency (BDDK) ruled that Turkish banks are allowed to swap only 10 percent of their legal capital. In August 2018, The BDDK had already lowered the limit of swaps, futures, forwards and options with a foreign currency and a Turkish Lira leg to 25 percent of the banks’ legal capital.