Economic News

Turkey’s COVID-19 Response

The world economy suffers due to coronavirus pandemic. Almost every country on the planet experience a decline in economic activity. The International Monetary Fund compares it with the Great Depression of The 1930s when many people lost their jobs, houses and couldn`t afford a proper meal.

Change in economic indicators 1929–32

 

United States

United Kingdom

France

Germany

Industrial production

−46%

−23%

−24%

−41%

Wholesale prices

−32%

−33%

−34%

−29%

Foreign trade

−70%

−60%

−54%

−61%

Unemployment

+607%

+129%

+214%

+232%

Source:Jerome Blum, Rondo Cameron, Thomas G. Barnes,The European world: a history(2nd ed 1970) 885 pp.

We can`t measure yet the results of ongoing crises.

Next survey presents increasing concerns among SMEs.

 

SME Surveys on the Impact of COVID-19

Date

Country

Impact on business

Expectations

10 Feb.

China

80% of SMEs have not resumed operations yet

1/3 out of business in 1 month, another 1/3 in two months

25 Feb.

Finland

1/3 anticipated a negative or very negative impact

n.a.

Early March

Italy

72% directly affected

n.a.

Early March

UK

63% see crisis as moderate to high/severe threat to their business

n.a.

9 March

Germany

50% expect a negative impact

n.a.

9 March

Japan

39% report supply chain disruptions, 26% decrease in orders and sales

n.a.

10 March

Poland

1/3 of SMEs experience increasing costs and reduced sales

27% already encounter cash flow problems

11 March

USA

70% experience supply chain disruptions, 80% the impact of the crisis

n.a.

12 March

UK

69% experience serious cash flow problems

1/3 fear being out of business in 1 month

13 March

USA

23% negatively affected, 36% expect to be

 

16 March

Canada

50% drop in sales

25% expect not to survive longer than 1 month

16 March

Israel

55% experienced no impact yet, 1/3 planning lay-offs

n.a.

16 March

Greece

60% experience marked decline in sales

n.a.

17 March

USA

50% negatively affected, 75% very concerned

n.a.

17-20 March

Korea

61% have been impacted

42% fear being out of business in 3 months, 70% in six months

18 March

Belgium

75% report declines in turnover

50% fear not to be able to pay costs in the short term

19 March

USA

96% have been affected

51% indicate not be able to survive three months

20 March

Hungary

60% expect a decline in sales

n.a.

20 March

Netherlands

50% start-ups lost significant revenue

50% expect to be out of business within 3 months

21 March

Japan

92% experience economic impact

n.a.

24 March

Canada

60% experience significant impact

1/3 expect to be out of business in a month

31 March-6 April

Several Asian countries

30% of SMEs expect to lay off 50% of their staff.

50% of SMEs have a month cash reserves or less

1 April

United Kingdom

n.a.

18% of firms could be out of business in one month

1 April

United States

n.a.

35% of small business out of business in three months

3 April

Australia

Two thirds of small business experience the impact of the crisis. 41% experience a drop in income of 50% or more in the last two months

n.a.

3 April

Belgium

40% of companies see drop in revenue of 75% or more

1 in 10 companies likely to face 

Source:Annex B; oecd.org

In order to minimize the negativities caused by coronavirus pandemic, governments take economic responses and change tax and fiscal policies.

 

TURKEY

If the company reduced working hours, it didn`t deduct a number of employees and employees meet the following conditions:
-Having fulfilled the last 60 days of service contract before the start of the Short Work Allowance application;
-In the last 3 years, at least 450 days must have been paid.;
then it is possible to benefit from the Short Work Allowance for a maximum of 3 months.

Turkish government paid 60% of the staff salaries for a period of three months and a daily allowance of 39.24 liras ($5.7) to workers forced to take unpaid leave – Short Work Allowance.

Payment of social security contributions (SGK Premium Payments) for some sectors, persons over 65 years old, and those with chronic diseases have been postponed.

Sectors:
Retail (including shopping malls),
Health Service,
Furniture manufacturing,
Iron, steel and metal industry,
Mining and quarrying,
Construction,
Automotive manufacturing,
Rent a car,
Logistics and transportation,
Cinema and theater,
Publishing activities,
Accommodation activities,
Food and beverage services,
Textile-apparel manufacturing,
Event and organization services.

On 31st July, VAT has been reduced to 8% from 18% until 31 December 2020 on the following: events and conferences; cultural events; domestic repairs; hospitality services.
Hotel accommodation and services are free of VAT until November.
Air transport, domestic flights VAT has been reduced from 18% to 1% for 3 months.
Corporate tax-paying have been postponed.
Bank loan and interest payments are postponed for at least 3 months.