Turkey enters Covid recession

Turkey saw a record number of people diagnosed with COVID-19 for the second day running on Sunday as 6,017 new symptomatic patients were documented, the health ministry said.

 

The number of new daily cases are now running at higher levels than the outbreak’s previous peak in April.

 

Evening lockdowns were introduced over the weekend for the first time since June, with businesses such as restaurants and bars ordered to close. The ministry said a total of 446,882 patients with symptoms had been identified since the country’s first recorded case in March. Turkey doesn’t publicly report confirmed coronavirus cases in people without COVID-19 symptoms, a policy that has been criticized for masking the true scope of the national outbreak.

 

“Let’s follow the precautions for our loved ones,” Health Minister Fahrettin Koca tweeted, referring to hand-washing, distancing and mask-wearing measures.

 

Turkey is blatantly lying about the depth and the severity of its Covid-19  scourge, by failing to report asymptomatic cases. A survey of  family health practitioners by Turkish Medical Association finds 45K cases/day, with half a million people in home-quarantine, and a total infected population of 1.5 million.

 

However the government knows how badly the nation is hurt, because evening lockdowns were introduced over the weekend for the first time since June, with businesses such as restaurants and bars ordered to close.

 

Cinemas and schools will also be closed for the rest of the year, with students resuming online education after face-to-face instruction for most grade levels resumed briefly this fall. Shopping malls and hair salons will operate on reduced hours while restaurants and cafes will offer only takeaway and delivery services.

 

Employees in specific sectors such as manufacturing and agriculture will continue working through the curfews “in a way that will not disrupt supply and production chains,” Erdogan said after a cabinet meeting Tuesday, adding stricter measures would be imposed if rising infection trends continue.

 

Mr Erdogan is too late, health experts agree that the country needs a complete lockdown for at least 2 weeks, preferably four, just to flatten the curve of infections.

 

Erdogan is hesitating to take that faithful step, because the a.m. partial closures already added 2.5 million people to the ranks of the unemployed. This is roughly 11% of the active workforce. With budget deficits reaching 4% of GDP YoY through October and banks constrained by bad loans to lend more to the government, bankrolling the welfare programs for the newly unemployed will be excruciating.

 

Mr Erdogan doesn’t understand that keeping a virus-ridden manufacturing sector open doesn’t help the economy.  The newly unemployed will by necessity curtail spending.  The shock to domestic demand is coming on top of tightening monetary policy and banks retrenching on new loans, as corporate restructurings proliferate once again.

 

Turkey’s Covid recession has started, but data will only catch up with the reality on the ground in 2 months.

 

Atilla Yesilada

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.