The southeast of Turkey has been hit hard by the earthquakes and the economy in provinces such as Hatay, Gaziantep and Adiyaman has come to a standstill. The region has already suffered a major blow in recent years: trade is hardly possible due to the civil war in Syria. How important is the area for the Turkish economy?
The affected area consists of ten provinces and is regarding twice the size of the Netherlands. A total of 13.4 million people live there, according to figures from the Turkish statistics agency TÜIK. The region accounts for 9.3 percent of GDP and is therefore important for the Turkish economy.
The city of Gaziantep and its surroundings form the economic heart of the region. There are therefore different types of industries to be found. There are companies in the textile, food, metal, machine and chemical industries. Furthermore, shoes, plastic, leather and furniture are made. Agriculture is also an important sector, in which many pistachios are grown. The export of the popular nuts amounted to more than 181 million dollars (169 million euros) last year.
In the heavily affected province of Hatay, the port of Iskenderun plays a major role in the flow of goods to the Turkish hinterland and northern Iraq. The port also occupies an important position for transhipment to the Far East.
Disaster hits Turkish economy anyway
It remains to be seen what the consequences of the disaster will be for economic growth in Turkey. The southeast has been hit hard by the civil war in Syria in recent years. Trade with cities such as Aleppo came to a standstill.
According to Turkey analyst Timothy Ash of BlueBay in London, the disaster will hit the country’s economy anyway. How big the impact is, according to him, is guesswork.
In any case, the blow will not be as hard as the 1999 earthquake around Izmit, near Istanbul. That is the economic center of the country. Then the Turkish economy contracted by 3.3 percent following a growth of 3 percent the year before. A year later, the Turkish economy rebounded with a growth of 6.9 percent.
Trade in Turkish stock market halted
According to Ash, the economic consequences of the earthquake are difficult to estimate at this time. The International Monetary Fund (IMF) currently expects growth of 3 percent. This does not take into account the consequences of the disaster, so growth might be much lower.
Earlier this week, trading on the Turkish stock exchange was halted due to investor panic. At the time, the Borsa Istanbul was down 7.1 percent on a daily basis, its biggest loss since March last year.
It is the first time since 1999 that trading on the Turkish stock exchange has been halted. At the time, trading was halted for a week due to concerns among investors. “We have decided to suspend trading in stocks, futures and options markets,” Borsa Istanbul reported. It is not yet known when trading will resume.
