Turkish Business Group Sees Quakes’ Economic Toll at $84 Billion

(Bloomberg) — The two massive earthquakes that killed over 24,000 people in Turkey are expected to result in an loss to the nation’s economy of over $84 billion, or about 10% of the GDP, according to estimates of a business group. 

The 7.7 and 7.6-magnitude quakes on Feb. 6 are projected to have caused about $70.8 billion of damage to residential buildings and a further $10.4 billion loss in national income, the Turkish Enterprise and Business Confederation said. 

The group, commonly known as Turkonfed, said losses to the labor force would cost Turkey’s economy $2.9 billion. The quakes severely affected 10 provinces and 13.5 million people in the country’s southeast, as well as in neighboring Syria.  

Turkonfed’s calculations were based on 1999 earthquakes near Istanbul that killed about 18,000 people. The toll in the latest devastation has far exceeded that of the 1999 quake, and thousands remain missing. 

The estimate is also bigger than what other economists have calculated so far, although many, including Barclays Plc, have highlighted that it’s too early to assess the full impact.

The damage to Turkey’s infrastructure, including roads and power grids, as well as to hospitals and schools, may push the nation’s budget deficit over 5.4% of GDP this year, versus the official forecast of 3.5%, according to the report. 

Bloomberg Economics’ initial calculations showed disaster-related costs including rebuilding efforts could make up about 5.5% of GDP. 

President Recep Tayyip Erdogan said his government would complete housing within a year and some 100 billion liras ($5.3 billion) have been initially allocated as disaster relief.   

©2023 Bloomberg L.P.

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