BY DR. ATILIM MURAT
The 1999 Marmara earthquake triggered the 2000-2001 economic crisis. The Turkish economy wasn’t stable before this crisis as well. Annual budget deficits exceeded 10% of the national income. Inflation averaged 75% in the 1990s. The current account deficit was financed by short-term capital inflows. Public deficits were closed with domestic borrowing. Banks raised their deficit positions with short-term borrowing. They invested in government debt securities with these sources. Risks increased. It’s hard to estimate the cost of the earthquake centered in Kahramanmaras for Turkey. We talk about a region where 13 million people live. There will be economic reflections and a major deviation in the budget deficit/national income ratio which we always boast about. Inflation forecasts will be revised upward with the hike in the budget deficit. Buildings, which didn’t collapse, will be reconstructed. The construction industry will naturally be backed. The pressure on banks will continue as the Treasury’s borrowing need will increase. The Turkish economy will not experience a crisis. Because it doesn’t have the same macro environment as it was before the 2001 crisis. However, there will be a significant deterioration in some economic indicators.
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