Economists said that more positive results will be obtained from the economic support package initiated under the leadership of public banks, with the strong support of private banks, and that the second half of the year will be better than expected for the Turkish economy by taking bold, determined and rational steps and re-establishing confidence in households, real sector and investors.
Following the new type of coronavirus (Covid-19) epidemic that has affected the whole world, both governments and central banks are taking measures one after another to solve social and economic problems.
Last week, President Recep Tayyip Erdoğan activated a resource set of 100 billion liras with the package he called “Economic Stability Shield” after the Coordination Meeting against Coronavirus at Çankaya Mansion.
While the Central Bank of the Republic of Turkey (CBRT) also took measures to alleviate the possible negative effects of the epidemic on the Turkish economy, the Banking Regulation and Supervision Agency (BDDK) made a strong recommendation that financial institutions should not victimize their customers. The Banks Association of Turkey (TBB) also made recommendations to its members to support economic activity.
While public banks offered significant support to the real sector, SMEs and individual customers this morning to overcome this difficult process, İş Bank became the first private bank to take steps in this direction.
Economists emphasized that with all private sector banks contributing to the economic support packages initiated by public banks, both companies and individual customers will overcome this difficult period with minimal losses.
“The aim is to normalize faster”
AA Finance Analyst and strategist Cüneyt Paksoy, in his evaluation of the economic measures and announced packages, stated that the chaos and anomaly in global markets due to the virus effect negatively affected all asset prices on a global scale.
Paksoy said that the uncertainty about the process and the difficulty of making a rational analysis regarding damage assessment resulted in the extra rise of the dollar index and the pressure on all other asset prices, and stated that the singular and coordinated steps of the central banks on the financial markets are effective to a certain extent for now.
Paksoy underlined that governments continue to announce financial measures and support packages more effectively on the political side in order to protect the real sector, individuals and public balances.
Paksoy stated that the actions of Turkey, which proactively implemented financial and financial measures in a coordinated manner within the financial discipline and balancing in 2019 after the exchange rate attack in 2018 and started the change process with significant results, and that the basic basis thesis seems to be approved and accepted on a global scale in the current outlook. , said:
“In the current situation, while new packages and measures are being announced due to the virus effect, the aim is to both protect the gains and overcome this process with the least damage. Public banks are once again leading the way in order to see the first effects of the decisions taken in this direction on the field. Managing and deferring debts and liabilities for a certain period of time The leading signals of a process in which incentives and supports will be designed separately according to sectors such as tourism are also noticeable in the announced decisions. When we examine it as a whole with the new credit support opportunities announced in order to protect employment, it will affect the real sector and individuals on the consumption side in the short and medium term until the virus process is over. “The aim is to support and protect, and to ensure faster normalization after the virus process.”
Cüneyt Paksoy added that with the participation of public banks, other private sector banks and the real sector’s own efforts, and the public support of the state, it may be possible to develop the protective shield effect in a leveraged manner until the virus effect peaks and normalization comes.
“Private banks should also take similar steps as soon as possible”
Virtus Glocal Managing Partner İnanç Sözer said that we are in a period where we are trying to fight a global recession for the first time in 12 years, due to the effects of the virus that started in China and spread all over the world.
Evaluating that Turkey has not managed the process well so far in terms of both health and economy, Sözer said, “Today is the time to give a coordinated reaction to alleviate economic problems with the support of citizens who are conscious of staying at home unless necessary and the support of both public and private banks, especially the public authority.” said.
Sözer emphasized that greater coordination should be done under the umbrella of the G-20, which was the critical success factor that enabled us to overcome the crisis of the century in 2008.
“As each country searches for its own solution, interest rate cuts, additional liquidity and tax incentives will have limited impact.” Sözer stated that the ongoing stress in financial markets clearly shows that all the monetary and fiscal policies adopted recently are not sufficient.
Sözer made the following evaluations:
“Unless the G20 countries gather and produce central bank and fiscal policy solutions in a coordinated manner, the recovery will be slow. Because it should not be forgotten that this time we are experiencing a problem caused by the balance sheet crisis in the real sector rather than the turmoil in the financial sector. For this reason, focusing directly on the sales and financial performance of the real sector There is an urgent need for a package of measures. In this context, the ‘Economic Stability Shield’ and the decisions announced by public banks today, especially after the suspension of enforcement and bankruptcies until the end of April, are very useful and admirable measures.
I hope private banks will take similar steps as soon as possible. From a macroeconomic perspective, the priority should be neither inflation nor budget deficit and public debt stock. If we cannot take bold steps to solve the extraordinary problems in the real sector as a country, we will have to face a much more severe situation. This being the case, since most of the burden is left to public banks, urgently increasing the capital of public banks by the Treasury would be a useful step. “If we can take bold, determined and rational steps and regain confidence among households, the real sector and investors, I predict that the second half of the year will be better than expected for the Turkish economy.”
