As the government of Türkiye implemented a new economic model, the country was plagued by high inflation and currency collapses for years. In January, Nureddin Nebati, the country’s Treasury and Finance Minister, predicted that inflation will continue to fall, and family incomes would rise thanks to the government’s focus on economic growth and job creation in 2023.

Nebati pledged then to maintain the government’s focus on investment, employment, production, and exports in 2023, as part of the economic model proposed by the government in late 2021 to reverse Türkiye’s chronic trade deficits, a significant component of the country’s current account. Inflation, which reached a 24-year high in October before moderating over the subsequent two months and is forecast to decline considerably this year, is another focus of the model’s emphasis on targeted loans and low interest rates.

However, years of foreign exchange reserve depletion and central bank degradation have left their mark on Türkiye, despite the fact that the country’s debt levels are significantly lower than those of most others. Moreover, output in the area, which contributes 9.3 percent to Türkiye’s GDP, is projected to be negatively impacted by the earthquake (GDP).

Data from the Energy Exchange Istanbul (EPIAS) indicated that energy consumption in Türkiye declined by 11% on Monday, compared to the previous week. The economy could suffer this year due to the interruption.

In June 2022, Türkiye exports reached $23.4 billion, the biggest monthly total in the country’s history. Under the case of a 50% reduction in regional output, three analysts estimated GDP growth might fall by 0.6 to 2 percentage points, with a recovery time of 6-12 months. The administration predicts a 5% expansion in the year 2023.

A separate high-ranking official has warned that growth may fall short of expectations by 1% to 2%. According to the official, some of the investment resources planned in the budget will need to be spent for these regions.

An estimated 8.5% of Turkish exports and 6.7% of Turkish imports come from the earthquake-stricken southeast area. Economists, however, suggest that the earthquakes will likely have little effect on Türkiye’s trade balance since both exports and imports are projected to decrease.

Use TradeData.Pro to keep a close eye on the latest trade developments in Türkiye. You may also visit Türkiye’s import-export data page for trade updates.

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