View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. Comment
March 19, 2020updated 20 Mar 2020 8:19am

Turkey eases its fiscal and monetary policy amid the coronavirus outbreak

Accor plans to grow Emblems Collection brand to 60 properties across the world by 2030.

By GlobalData

Turkey’s policymakers have taken steps to support the economy as the impact of the coronavirus worsens.

There has been an easing in monetary and fiscal policy stances in Turkey, with the government and central bank seeking to reassure businesses and markets amid the escalating outbreak.

On March 17th, the Turkish central bank reduced its key interest rate by 100 basis points to 9.75% and announced measures to support lending to businesses struggling with liquidity due to the virus outbreak.

As the virus outbreak worsens in the country with 192 cases reported and three deaths, the Turkish President Tayyip Erdogan has announced quarantine measures, including a lockdown. Flights into the country have been suspended with the government ordering the closure of cafes, bars and restaurants to slow down the spread of the virus.

The President also announced a $15.5 billion fiscal stimulus package amid worsening economic conditions in Turkey. The package will aim to support businesses struggling due to the virus outbreak and will include tax reliefs with VAT on domestic airlines cut from 18% to 1%. Tax payments for the hospitality, tourism and automotive sectors will be deferred for the next three months.

The construction sector is expected to suffer as a result of the outbreak, particularly if workers are not able to get on-site, projects are likely to be halted. However, as Turkey is a net importer of oil, the sharp falls in the price of oil and other commodities are expected to support growth in the sector. GlobalData forecasts that output in the construction industry will increase by 3.2% in 2020, following a deep contraction of 9.2% in 2019. The growth forecast is contingent on the virus outbreak being contained by mid-2020, however, a downward revision of the forecast is likely if the situation worsens in the coming months.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU