Turkey to provide $9 billion to the markets

ISTANBUL

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Turkey’s coronavirus relief package will provide $8-9 billion liquidity to the markets in the next three months, Finance Minister Berat Albayrak said on March 19.

“Turkey’s economic growth will exceed expectations in the first quarter, with a slight slowdown in March due to the coronavirus,” Albayrak told Anadolu Agency.

He had “no concerns” about Turkey’s ability to meet its economic growth of 5 percent, budget and inflation targets for 2020 despite expectations of a potentially severe global recession, Albayrak added.

“Fiscal policy is a weapon against negative scenarios of global picture, we will use it when necessary,” he added.

Turkey has unveiled a relief package worth 100 billion Turkish liras ($15.4 billion) to limit the economic fallout from coronavirus.

President Recep Tayyip Erdoğan announced the package, which includes debt payment delays and tax cuts across various sectors, following a meeting on measures to counter the pandemic at Çankaya Palace in Ankara on March 18.

“Value added tax (VAT) on domestic airline flights has been cut to 1 percent from 18 percent for a period of three months," Erdoğan said.

He added that accommodation taxes will also not be applied until November.

Also, social security premiums and VAT deductions have been suspended for six months across various sectors, including retail, malls, iron-steel, automative, logistic and textile.

Moreover, credit payments for firms who are facing cash flow disruptions due to coronavirus will be postponed for three months, he added.

“We will provide additional support to those companies when needed,” he said.

The president said credit payments of craftspeople and artisans to state lender Halkbank will also be delayed for three months without interest.

The country also doubled the credit guarantee fund's limit to 50 billion Turkish Liras ($7.70 billion), up from 25 billion liras ($3.35 billion).
He urged employers to encourage flexible and remote working models to stem the spread of the virus.

"We will encourage credit packages for citizens under favorable and advantageous conditions," said Erdoğan.

He added that the lowest pension amount has also been increased to 1,500 liras ($231).

The Turkish Banking Association (TBB) yesterday announced a set of recommendations for lenders to revive business activity.

“We recommend to our banks that they support their customers who need additional credit and have difficulty paying their debt on time,” the statement read.

The Confederation of Turkish Employers Unions (TİSK) President Özgür Burak Akkol hailed the measures, saying that the Economic Stability Shield Package will help the continuity of production and export, competitiveness on the international level and safeguard employment.

The main opposition Republican People’s Party (CHP) has said the package “fell far short of expectations.”

CHP Istanbul Deputy Akif Hamzaçebi announced a 27-point Community Solidarity Program, including postponment of taxes and insurance premiums.