Economists and officials estimate that the earthquake will reduce economic growth by up to two percentage points this year
The worst earthquake in Turkey in a century left behind devastation that may cost Ankara up to 84.1 billion dollars, according to business organization estimates, while a government official said that the amount will exceed 50 billion dollars.
The death toll in Turkey and Syria from last Monday’s 7.8-magnitude earthquake is approaching 36,000 and is seen as certain to rise as the focus of the response has shifted from rescuing survivors trapped under the rubble to providing shelter, food and psychological care.
A report published over the weekend by the Turkish Business Confederation put the cost of the damage at $84.1 billion — $70.8 billion from repairs to thousands of homes, $10.4 billion from the loss of national income and $2.9 billion .from the loss of working days.
It says the main costs will be rebuilding homes, power lines and infrastructure, and meeting the short-term, medium-term and long-term housing needs of hundreds of thousands of homeless people.
President Tayyip Erdogan has said that the state will complete the reconstruction of houses within a year and that the government is preparing a program to “make the country stand up again”.
About 13.4 million people live in the ten provinces affected by the earthquake, or 15% of Turkey’s population, and produce almost 10% of GDP.
The impact of the earthquake on gross domestic product is not likely to be announced as it was after the 1999 earthquake in northwestern Turkey, which hit the industrial hinterland, International Monetary Fund Executive Director Mahmoud Mohieldin said on the sidelines of the Arab Fiscal Forum on Sunday.
Mohieldin added that after the initial effects will be seen in the coming months, public and private sector investment in reconstruction could lead to an increase in GDP.
However, economists and officials estimate that the earthquake will reduce economic growth by up to two percentage points this year.
The government is forecasting growth of 5% in 2022 and estimated it would reach 5.5% in 2023 before the earthquake.
Turkey is due to hold presidential and parliamentary elections later this year — the biggest challenge Tayyip Erdogan has faced in his two decades in power.
A three-month state of emergency has been declared in the 10 affected provinces and the central bank has suspended some loan payments. The finance ministry declared a state of force majeure until the end of July and suspended tax payments for the region.
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