Turkey’s central bank governor admits economy weakened by corona

Ahmed Sami Abdel Fattah

The corona pandemic continues to dominate the international scene, especially in light of the negative repercussions on the global economy, which is expected to sharply contract this year.

The International Labor Organization (ILO) has warned that nearly a third of the world’s workforce is threatened with losing their jobs as a result of the worldwide economic downturn.

Turkish Central Bank Governor Murat Uysal acknowledged that the corona crisis has caused negative repercussions for the Turkish economy. He had previously aspired for Turkey to be among the world’s top ten economies by 2023, but it seems that the unexpected pandemic has shattered all Turkish plans.

Uysal confirmed in an online press conference on Thursday, April 30 that Turkey is trying to reduce the negative effects of the pandemic through a package of measures, at a time when the exchange rate of the Turkish lira has decreased significantly.

Economic activity in the country began to weaken in March as tourism declined, Uysal explained, stressing that Turkey would not resort to the International Monetary Fund (IMF) in order to confront the effects of the pandemic, as he believes any fluctuations in monetary reserves will be temporary.

The Turkish central bank’s foreign currency reserves have declined by about $17 billion, reaching about $89 billion, while the Turkish government has pressed banks to pump foreign currencies into the market in order to prevent the collapse of the lira.

Turkish affairs researcher Mohamed Rabie noted that the Turkish economy had already been witnessing a state of decline and contraction prior to the outbreak of the corona virus.

Rabie added that Turkish President Recep Tayyip Erdogan’s policies have destroyed the Turkish economy, especially since Turkey’s losses from the war in Syria have been huge and investors have scattered. Meanwhile, the lack of credibility in the Turkish regime regarding the numbers of people infected with the corona virus has led to more economic deterioration in the country.

The London- based Capital Economics Research Institute expected in its latest report on the impact of the corona pandemic on developing countries that the Turkish economy will shrink by about 2% in 2020, in addition to a decline in GDP during the first half of the year by about 20%.

Moody’s credit rating agency predicted that Ankara will be the most affected by the cumulative deflation of GDP for the second and third quarter by about 7% in 2020.