Earthquakes cost more than $50 billion

Heavy Although the aftershocks of the earthquakes centered in Kahramanmaraş, where casualties were experienced, continue both in the earthquake zone and in the economy, the bill is getting heavier. Forecasts revealed that the base effect on inflation would disappear in this period as Turkey moved towards elections, leading to a widening current account deficit and a loss of growth. According to the calculations, although the direct cost of the earthquake is expected to exceed 50 billion dollars, all targets and forecasts have been revised, from exports to exchange rate policy and inflation. According to the latest data, the earthquake that affected 11 provinces caused more than 43,000 victims. According to the analysis produced by Reuters, which includes the opinion of government officials and economists, although the economic effects of the problems in employment and production with the earthquake are expected to extend over time, the earthquake is considered to cost more to the economy of 50 billion dollars.

ADDITIONAL BUDGET WILL BE NEEDED

According to the analysis, Turkey will enter the election, which is estimated to be the May-June period and for which a new decision has not yet been made, with inflation of approximately 45 percent due to the earthquake. JP Morgan also revised its year-end inflation forecast to 45 percent from 43 percent. The quake also caused electricity consumption to drop 11 percent the first day and 7 percent the first week, and credit card spending fell nearly 20 percent the first week. While it has become a general expectation that the earthquake will reduce growth by 1-2 points, economists’ budget deficit estimates, which were around 3 percent before the earthquake, increased to 5 percent after the earthquake. A government official told Reuters: “Ending the year with the current budget does not look easy. There will be a need for an additional budget, ”he said.

$45.7 billion in financing needed to recover losses

Analyzing the impact of the earthquake on the economy in an article he posted on his personal blog, economist Mahfi Eğilmez noted that from today’s outlook, the financing Turkey needs to find to cover, repair and replace earthquake losses is of 45.700 million dollars. .

Calculating the loss of GDP by 2023 at $21 billion in total, Eğilmez said: “We estimate that our total loss of exports will be about $7 billion. We expect the fiscal loss in all these provinces to reach 3 billion dollars in total. Under these influences, we are revising our year-end inflation forecast for 2023 to 50 percent.