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3.1 ​Macroeconomic overview
The ​EBRD​: "Demand-side economic effects are likely to be larger in countries where retail services account for a greater share of GDP, as in Lithuania, Poland, Cyprus, Montenegro and Turkey.”
Payments made with credit cards and debit cards declined by 30.8% w/w to a value of Turkish lira (TRY) 13.6bn ($1.9bn) in the week ending March 27, according to data from the central bank.
The data clearly demonstrates the heavy impact of the pandemic on the Turkish economy, which prior to the health and economic emergency was showing clear signs of expanding growth thanks to the Erdogan administration’s credit fuelling policies.
Expenditures on supermarket items dropped to TRY4bn in the week from TRY5.3bn a week earlier. People spent some TRY370mn on clothing, down from TRY1.63bn two weeks ago.
Many people, particularly in the large cities, have been heeding calls from the authorities to stay at home (though far from all, with Istanbul’s mayor issuing strong calls to the central government for the imposition of a lockdown), which obviously slows consumption.
On April 2, Bank of America became the latest financial institution to revise its GDP forecasts for Turkey—it now sees -2.3% for 2020 against its previous estimates of +2.5%.
The World Bank has slashed its 2020 GDP growth forecast for the Turkish economy to 0.5% from 3.3%.
If Turkey maintains its current course with selective curfews, it will suffer a 17% economic contraction in 2020, according to the research findings of five Turkish economists at Koc University in Istanbul and the University of Maryland ​made​ public on April 16.
A Reuters poll showed on April 21 that the median forecast of 40 economists was for a contraction of 1.4% in 2020, with declines in the second and third quarters of 8.6% and 5.3%, respectively.
For the first quarter of this year, the poll produced a prediction of +4.4%. The official data is due on May 29.
15​ TURKEY Country Report​ May 2020 ​ ​www.intellinews.com