Turkish business skeptical of “V” shaped recovery

Turkey’s President R.T. Erdogan is betting on a rapid recovery of the economy, to boost his AK Party’s fortunes in the polls and to lighten the load in the budget, which has shown a deficit of TL105 bn in March-may period.  There are several polls revealing that the public praises the Erdogan administration for its management of the Covid-19 epidemic, but assigns very poor marks to its handling of the economy. According to BETAM think-tank, Turkish GDP may shrink by as much as 7.5% in Q2 YoY.

Alas, there is very bad news for Erdogan: A recent poll has revealed that a whopping majority of 82 percent of Turkey’s companies have revised their fiscal projections for 2020 because of the COVID-19 pandemic. Meanwhile, 81 percent of companies reported having developed a corporate communications strategy about the outbreak.

A recent survey of some 208 companies revealed that 82 percent of firms in Turkey revised their annual fiscal projections for 2020 after the COVID-19 pandemic broke out in the country in mid-March, reports Duvar English, a dissident news portal.

While 38 of all companies in Turkish Institutional Management Association’s survey were publicly traded, 82 percent of the overall participants revised their cash flow and financial goals because of the outbreak.

Some 81 percent of participating companies revealed that they had a communications strategy to handle the pandemic and 85 percent reported sufficient physical infrastructure to allow employees to work from home.

While some 21 percent of companies’ boards met once a month and 20 percent met once a week, 43 percent only met when necessary.

A majority of 72 percent of participants didn’t foresee any changes to their companies’ board, while 23 percent of the remainder guessed that a technologically advanced member would be added.

Meanwhile, some 55 percent predicted changes to their company’s board’s authorities after the pandemic to increase counseling and supervision.

Turkey has been losing ground vs EU in economic terms since 2019, according to state-owned news agency AA:

Turkey’s gross domestic product (GDP) per capita index based on purchasing power parity (PPP) was 61 while the average for the EU countries was 100 last year, Turkey’s statistical authority announced on Thursday.

The index decreased 4 points from 65 a year earlier.

Turkey’s GDP per capita index was 39% below the EU average, according to the preliminary results of the European Comparison Program for 2019, the Turkish Statistical Institute (TurkStat) said.

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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.