A large, catastrophic, life changing event like the 7.8 magnitude earthquakes that struck Turkey and Syria on February 6th can have major economic effects on these nations, on top of death tolls, the destruction of homes, and an uncertain future. This was to be a crucial year for the Turkish economy, due to a great amount of notable changes in their social, political, and economic realms. Turkey was already subjected to high energy prices, and other national security issues due to effects of the war in Ukraine. However, economic policies enacted by Erdogan kept interest rates on bank deposits between 10-15%, despite severe inflation rates in Turkey. This earthquake will change everything about the current economic standing of Turkey. The Turkish economy was projected to grow by about 3-3.5% in 2023, but now with a possible disaster relief cost of up to $84 billion, this growth certainly will not stand. With over 8,000 residential and commercial buildings completely destroyed, thousands of public schools, hospitals, and government offices damaged, and gas, oil, and electricity lines broken, there is going to be a severe investment of national funds to this repair, as opposed to the investment in economic infrastructure. A loss of 2.0-2.5% of growth is projected to be lost, therefore the country is only expected to grow its GDP at a rate of 0-0.5% in 2023.
https://www.cnbc.com/2023/02/09/turkey-earthquake-comes-at-a-critical-time-for-the-countrys-future.html
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After a difficult year, Turkey's beleaguered economy appeared to be on the mend in early 2023. Just six months earlier, in June 2022, the economy was on the verge of collapse: Turkey was facing a potential balance of payments crisis, which meant it would be unable to redeem foreign currency debts and pay import bills. Things gradually began to improve in the months that followed, as Turkey benefited from stronger global economic conditions combined with new domestic corporate capital restrictions, informal cash inflows from abroad, and better-than-expected winter weather, all of which provided a temporary reprieve from the country's long-standing economic woes. Then horrible earthquakes on February 6th crippled Turkey and Syria both morally and economically. As emergency workers are continuing search for people in the rubble, the number of deaths has equaled 40,000 as of today. It is believed that most of the residential apartments and buildings were not properly inspected and were built illegally in the first place. Total physical damage and future growth loss are estimated to be in the tens of billions of dollars.
It's very sad to hear that Turkey's economy is going to struggle due to an uncontrollable event happening. This earthquake is very devastating as it's effects will ripple all over the nation and bordering countries that do business with Turkey. I saw something that disaster relief was being delayed or coming in at lower quantities, I hope that issue gets resolved quickly so the Turkish people can rebuild more efficiently.
It truly is a tragedy that's affected so many people. Based on what I've seen in the news recently, hopefully all of the countries offering aid to Turkey will allow their economy to recover to a somewhat normal level by the end of the year. A disaster such as this could cripple the economy, but hopefully with the help of other nations they're able to persevere through this.
Eliza,
I loved this post. This has definitely been at the headline of many news broadcasts and newspapers recently. I loved how you summarized the potential Turkey had before this earthquake. I think that really captures the full picture of how this natural disaster has so many more effects than just physical damage to the country. It will definitely be interesting to watch as they get aid from around the world and slowly redevelop their country and the economic trends to follow.
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