Earthquake could cost Turkey up to $111b: Business group

ANKARA - Turkey’s worst earthquake in almost a century has left a trail of destruction that could cost Ankara up to US$84.1 billion (S$111.96 billion), a business group said, while a government official put the figure at more than US$50 billion.

The combined death toll in Turkey and Syria from last Monday’s 7.8 magnitude quake approached 36,000 and looked set to rise, as the focus of the response switched from rescuing survivors trapped under the rubble to providing shelter, food and psychosocial care.

A report published at the weekend by the Turkish Enterprise and Business Confederation put the cost of the damage at US$84.1 billion – US$70.8 billion from the repair of thousands of homes, US$10.4 billion from loss of national income and US$2.9 billion from loss of working days.

It said the main costs would be rebuilding housing, transmission lines and infrastructure, and meeting the short-, medium- and long-term shelter needs of the hundreds of thousands left homeless.

President Recep Tayyip Erdogan has said the state will complete housing reconstruction within a year and the government was preparing a programme to “make the country stand up again”.

Some 13.4 million people live in the 10 provinces by hit by the quake, or 15 per cent of Turkey’s population, and it produces close to 10 per cent of gross domestic product.

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The earthquake’s impact on GDP is unlikely to be as pronounced as after the 1999 earthquake in north-west Turkey, which struck the industrial heartland, International Monetary Fund executive director Mahmoud Mohieldin said on the sidelines of the Arab Fiscal Forum on Sunday.

Mr Mohieldin added that after the initial impact over the next few months, public and private sector investments in rebuilding could boost GDP growth going forward.

Nonetheless, economists and officials estimated the quake would cut economic growth by up to two percentage points in 2023.

The government forecast growth at 5 per cent in 2022 and had estimated growth at 5.5 per cent in 2023 before the quake.

Turkey is due to hold presidential and parliamentary elections this summer – the biggest challenge to Mr Erdogan during his two decades in power.

A three-month state of emergency has been declared in the 10 provinces affected and the central bank has postponed payments on some loans. The Treasury declared force majeure until the end of July and postponed tax payments for the region.