An earthquake in southern Turkey that has claimed tens of thousands of lives will cost Ankara $84.1 billion, according to business estimates, while a government official said the figure would exceed $50 billion.
The death toll from the 7.5 and 7.8 Richter earthquakes in Turkey and Syria is approaching 40,000 last Monday and is expected to rise as the focus of the response shifts from rescuing survivors trapped under rubble to to provide housing, food and psychological assistance.
A report released over the weekend by the Turkish Business Confederation estimated the cost of damage at $84.1 billion – $70.8 billion from thousands of home renovations, $10.4 billion from lost national income and $2.9 billion USA from the loss of working days. It says that the main spending will be related to rebuilding housing, power lines and infrastructure, as well as meeting the short, medium and long-term housing needs of hundreds of thousands of homeless people.
President Tayyip Erdogan said the state will complete the renovation of the houses within a year and the government is preparing a program to “get the country back on its feet.”
The ten provinces affected by the earthquake are home to about 13.4 million people, accounting for 15% of Turkey’s population and producing almost 10% of GDP. The earthquake’s impact on gross domestic product is unlikely to be announced, as it was after the 1999 earthquake in northwestern Turkey that hit industrial areas, Mahmoud Mohyeldin, chief executive of the International Monetary Fund, said yesterday (Sunday) on the sidelines of the Arab Fiscal Forum. Mohieldin added that after the initial effect is seen in the coming months, public and private sector investment in reconstruction could lead to GDP growth. However, according to economists and officials, the earthquake will reduce economic growth this year by two percentage points.
The government predicts a 5% increase in 2022, and before the earthquake, it was estimated that it would reach 5.5% in 2023.
Turkey is expected 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 was declared in 10 affected provinces, and the central bank suspended payments on some loans. The Ministry of Finance declared a force majeure until the end of July and suspended tax payments for the region.
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