Turkish economy is recovering in the summer of 2021

The Negative Effects of the Outbreak on the Global Economy

The coronavirus outbreak that emerged in Wuhan, China in the last months of 2019 spread all over the world in a short time. The outbreak, which negatively affected all developed and developing countries all over the world, also negatively affected the economies. We can list the negative effects of the pandemic on the global economy as follows.

- There were big drops in the stock markets where the stocks of the companies were

With the Covid-19 outbreak, the uncertainty in the markets has also negatively reflected on the stocks of companies. Due to the large drop in stocks, loan costs were reduced in many countries and consumer spending was encouraged to stimulate the economy.

- Many people lost their jobs and income due to coronavirus restrictions

Many people lost their jobs and income due to the restrictions imposed within the scope of the coronavirus epidemic. Unemployment rates have skyrocketed in many countries, including developed countries. In the outbreak, many service sectors, especially the tourism and food and beverage sectors, suffered greatly. Various support packages have been announced for damaged businesses and their employees in Turkey. In order to prevent unemployment, a short-time work allowance was implemented and prohibited companies from firing their employees.

- Recession risk

The coronavirus outbreak is described by experts as a "unique crisis". Experts expecting a 3% contraction in the global economy state that this contraction will be the highest contraction since the Great Depression of the 1930s. With the reduction of the impact of the outbreak, countries such as China and India, whose economy is based on production, are expected to recover in a shorter time, while countries such as Italy and Spain, whose economy are based on the service sector such as tourism, are expected to recover more slowly.

- Travel industry was negatively affected

Undoubtedly, the travel industry is one of the most adversely affected sectors by the outbreak. Travel restrictions between countries, intercity travel restrictions, and restricted travel have adversely affected the travel industry.

- Oil prices fell sharply

Oil prices also fell sharply due to the restrictions imposed due to the Covid-19 outbreak. After the relaxation of travel restrictions, oil prices are expected to rise again.

- With the coronavirus outbreak, consumer confidence has also fallen dramatically

Restrictions imposed within the scope of the Covid-19 outbreak measures had a significant negative impact on store traffic and retail sales. According to some research, it is stated that many consumers are still worried about going shopping. With the relaxation of coronavirus measures, shopping traffic is expected to revive.

- The hope of vaccination against coronavirus

With the outbreak spreading all over the world, many pharmaceutical companies entered the race to develop vaccines. Many countries have pledged to spend billions of dollars on the Covid-19 vaccine and its treatment. There were record increases in the shares of some pharmaceutical companies.

The Future of the World and Economy after the Covid-19 Outbreak

Although the Covid-19 outbreak has emerged as a global disease that threatens social health, it has deeply shaken lifestyles, socialization tendencies of societies, and political and economic orders in developed and developing countries. During the coronavirus outbreak, one of the most important problems attracting attention in the world economy is an atmosphere of pessimism and insecurity spreading globally. This atmosphere has caused serious negative changes in consumer behavior. Suspension of other needs other than basic needs caused many countries to lose momentum in economic growth. With the introduction of vaccines developed against the Covid-19 outbreak, the normalization process started, and consumption habits started to return to normal.

2021 Could Be A Year of Recovery for Emerging Economies

The developing countries' economies are expected to recover faster from the epidemic process. The countries whose economy is based on production seem more advantageous in this case. The situation will be slightly different in countries whose economy is based on the service sector such as tourism. The recovery of these countries' economies will take a longer time. A contraction is expected in the economy of developing countries such as Argentina, India, Mexico, the Philippines, and South Africa in 2021. Unlike these countries, positive growth is expected in the economy of Turkey and China. As a result, overall positive growth is expected in the economy of developing countries in 2021. These countries, including Turkey, are expected to make great gains in 2021.

The Turkish economy is preparing to recover in the summer of 2021

Due to the coronavirus outbreak, the Turkish economy has suffered serious losses, as is the case all over the world. Many factors such as restrictions imposed within the scope of coronavirus measures, temporary closure of workplaces, increasing unemployment, and changing consumer behavior have adversely affected the Turkish economy. Aids such as the interesting campaign, short-time working allowance, and cash support campaign for its citizens made by the Turkish Government in 2020 in order to strengthen the economy and keep the market alive have made it easier to overcome a difficult process. Thanks to these aids and campaigns, the Turkish economy has been kept alive. After a tough year, 2021 is expected to be a year of recovery in Turkey, as in the rest of the world.

When 2021 is evaluated in general, it is expected that the Turkish economy will experience a partial or serious recovery. Especially the summer months are expected to be the most effective period in the recovery process. The policies of the Turkish Government will also play an important role in the recovery. The support packages announced in the early days of the outbreak had a great contribution to the country's economy. Markets that were kept alive helped to make the process go lighter. Among these supports, the short-work allowance has an important place, in particular. The gradual reduction of the support provided to the Turkish economy is important for the economy not to stop suddenly. It is predicted that inflation in Turkey will decrease significantly starting from the summer months of 2021. Experts are of the opinion that the current account balance and the economy will improve in 2021 as we exit the outbreak process.

Please contact the experienced real estate consultants of Diyar Turk Real Estate to get more information about the future of the Turkish economy and real estate investment in Turkey and to be informed about opportunities. Please do not hesitate to ask any questions you may have. You can contact us via our website or info@diyarturk.com e-mail address.