COMMENTARY: Covid-19 strikes back, adding another burden to the pathetic economic outlook

The number of coronavirus cases in Turkey increased eight times based on an analysis of the weekly COVID-19 infection and fatality rates since May 30. The country last reported over 57,000 cases in one week between June 27 and July 3, according to the data from the Health Ministry.


Turkey’s new Covid19 wave arrives at the worst possible time, when people are traveling throughout Anatolia for Eid visits and internal tourism, spreading new sub-variants across the nation.  Soon, Turkey’s leading tourism markets U.K. and Germany may think of imposing restrictions on visits by their citizens. Turkish economy is already reeling  under 80% CPI, a GDP growth rate of at most 2.5%, 22% broad-based unemployment and of course a sickly currency, the weakness of which is driven—among other things– by a widening external deficit.  The country can ill-afford a winter outbreak leading to new curfews and business closures.


The latest data shows that 57,113 people had COVID-19 infected, which resulted in 25 fatalities and 30,478 recoveries. This data indicated an eightfold rise in COVID-19 cases compared to the one-week data between May 30 and June 5, when 7,322 persons tested positive, with 19 deaths and 7,843 recoveries.


Several public  health experts commenting in press and on TV broadcasts, claim the positivity rate can be as high as 20%, with  each patient infecting up to 18 other.  Most scary is the prediction that actual cases could be 10 times as many as the official tally.


 Turkey’s Slow-Motion Currency Crash


Alpay Azap, a member of Ankara University Medical School and is also on the Board of Directors of the Turkish Society of Clinical Microbiology and Infectious Diseases, told Anadolu Agency (AA) that the new variants, such as BA.4 and BA.5, are the most contributing factor in the radical increase in case numbers. Besides, he asserted, “There is an understanding among people that the pandemic is over, and they neglect to comply with protective measures.”


“However, it is not over as the World Health Organization (WHO) and scientific communities have been emphasizing for the last couple of months. The virus continues to evolve, and there is a new wave caused by the sub-typed of the omicron variant,” he said.


Underscoring that these new strains are so contagious and even stronger against the immunity that comes from either recovering from the virus or the vaccines, Azap said: “We see a radical increase in the case numbers with the abolishment of all virus-related restrictions.”


Uncontrollable virus spread, unfortunately, increases the probability of people at risk of becoming infected, he stated. “Although there is a mild course in full vaccinated and young people, there is a severe course in unvaccinated and elderly people, those with various chronic diseases, and immunocompromised people,” he added. He emphasized the importance of COVID-19 measures in preventing the spread of the deadly virus, stating that wearing masks in enclosed areas, being cautious about social distance, and completing vaccine jabs are among the most significant precautions in this process.


Turkey has lifted most restrictions related to coronavirus after a sharp drop in the number of cases this spring. Currently, the only restriction in daily life related to the COVID-19 pandemic is the mask mandate in hospitals. However, most coronavirus patients do not end up hospitalized as much as it was in 2021 and 2020.


Erdogan’s Lethal Economic Legacy


The WHO warned this week that globally reported cases have increased by almost 30% over the past two weeks and BA.4, BA.5 variants were “driving waves” in Europe and America, according to WHO Director-General Tedros Adhanom Ghebreyesus.


Tedros said at a press conference on July 6 that a new sublineage of BA.2.75 has also been detected in countries like India. He named several factors as culprits in the surge, including a dramatic reduction in tests in many countries which “obscures the true picture of an evolving virus and the real burden of COVID-19 disease globally.”



Returning to Turkey, a buoyant tourism season was the only good news in an economy taking in water from many directions.  Summer tourism generates over 1 mn seasonal jobs, as well as injecting up to $30 bn into a $725 bn per annum economy.


The government pretending there is no massive outbreak to preserve the tourism season can backfire, if in August and September U.K. and EU nations place limits on touristic visits to Turkey.


A significant drop in expected tourism revenue means financing the $40-50 bn current account deficit to arise in the next 12 months would fall upon the Central Bank, which is estimated to have only $30 bn liquid FX reserves left to spare.


Negligence of Covid-19 is almost certain to trigger a nation-wide outbreak in autumn and winter, when because of seasonal flu  epidemics and poor living conditions, the fatality toll will be significantly higher than summer months.


The health care system is exhausted and ill-prepared to spend another winter fighting an outbreak, as murders of physicians, brain drain in the profession and low pay have already sapped morale.


For the economy as a whole, a national outbreak means curfews and closures, which will raise unemployment and stoke a wave of bankruptcies among small service outlets, which provide the bulk of employment. A 5-6% increase in unemployment can be expected, possibly pushing the economy into recession.


Finally, if as experts now expect EU, too, will suffer from a winter recession and Covid-19 wave, Turkish exports will take a sever hit, causing more unemployment and more importantly helping deepen the Balance of Payments bottleneck.


The Erdogan government is stuck between acknowledging the severity of the health problem now and losing substantial amount of tourism revenue or waiting until mid-autumn to take serious measures, thus risking  an economically disastrous winter.



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 and has contributed to the financial daily Referans and the liberal daily Radikal.