Question

On December 31 last year, China alerted the WHO to several cases of unusual pneumonia in Wuhan, a city of 11 million people. The virus was unknown. Several of those infected worked at the city's Huanan Seafood Wholesale Market, which was shut down on January 1. As health experts worked to identify the virus amid growing alarm, today, more than 8.5 million coronavirus cases confirmed worldwide, with at least 450,000 deaths and 4 million recoveries. The disease was confirmed to have reached Turkey on 11 March 2020, after a man who had returned to Turkey from Europe, tested positive.

As many countries and world capitals have been put under strict lockdown, major industrial production chains have been brought to a halt. Governments around the world have urged employees to work from home where possible. The travel industry has been badly damaged, with airlines cutting flights and customers cancelling business trips and holidays. In the United States, the price of a barrel of petrol turned negative for the first time in history.Together, we observed that the health crisis gradually turned into an economic crisis.

After this short reminder at the top; write an essay discussing the economic impacts of the shock on Turkey’s economy. In your article, discuss the effects of this economic shock on Turkish economy using the concepts of GDP, growth, inflation, unemployment, money markets, interest rates, aggregate supply and aggregate demand. Use a narrative based on the economic theories we saw in the course. Connect your ideas to each other with a scientific background. Give policy suggestions to shorten the effect of this shock on Turkish economy. While giving the policies keep in mind and state the constraints that the Turkish economy currently facing. Articles that are not scientifically written or written on internet slogans may not bring you the points you want

Answer 1

The coronavirus outbreak has impacted almost all the economies of the world. The economies had came to halt due to the lockdown position and Turkey is not an exception. The economy of Turkey is also badly affected by the coronavirus outbreak and the country has also witnessed the deaths of people which is another loss to the economy. It is seen that the country is going to see an economic downfall over a decade and this is only due to COVID-19. It is forecasted by the economist that there will be a shrinkage of 1.4% in the year 2020. Before the pandemic, the government was of the view that they will leverage the economy by 5% which will help the people of the country. The country is also facing a huge loss in the exports and imports and this has impacted the economic growth of the country. This will also impact the aggregate demand and the aggregate supply as the government will not be import and export the items. The inflation rate will also see the downfall of 3.7 % in the year 2020. This will increase unemployment as the government has to use its resources to fulfill the needs of the people. The unemployment will also be increased as much as double the rate before the coronavirus outbreak as a lot of sectors are facing the lockdown challenges. it is assumed that around 10 million people will get unemployed in Turkey. to deal with all these situations the government has liquidated the economy by giving USD 15 billion to cope up with the current situation. This will help the business to come out of the shock of the losses faced by the pandemic. The government has also saved the business from tax cuts and the payment deferrals and the moratorium is also allowed for the next three months which will help the business to have some time to regain their strength as they have gone through shock due to the pandemic and the business have come to standstill.  The government is also looking to support the economy in every possible way to fight the global pandemic. They are also working to maintaining liquidity in the markets with the help of banks so that the economic losses can be minimized.