Turkey’s Top Businesses Urge Erdogan to Do More on Virus Fallout

(Bloomberg) --

Turkey’s top industrialists are calling on President Recep Tayyip Erdogan to introduce stricter measures to fight coronavirus and boost stimulus to kick start the economy once the pandemic is over.

The board of the business group Tusiad penned a letter to the Turkish president after he announced a 100 billion liras ($15.4 billion) package of tax cuts and payment deferrals to support the economy, according to people familiar with the matter.

In the letter, business chiefs said Turkey needs a bigger government support program to mitigate the economic fallout from the spread of the coronavirus, according to the people, who asked not to be identified discussing the matter.

Their call to the Turkish leader shows growing discomfort among the country’s most influential businesses as they seek support to offset the weakening demand at home and in export markets led by Europe. Hundreds of thousands of businesses have shut down, while a gauge of confidence among Turkish manufacturers fell by the most since the 2008 global financial crisis. That is even though the number of coronavirus cases at 3,629 is still relatively mild.

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The presidency and Tusiad both didn’t return calls seeking comment.

The Discontent

Treasury and Finance Minister Berat Albayrak portrayed a bullish outlook for the $753 billion economy last week, when he said the government maintained its 5% growth target for the year. But his optimism is hardly the consensus among Turkey watchers.

A likely plunge in revenues from tourism and foreign demand for exports will outweigh gains from lower oil prices, Fitch Ratings Inc. said. According to Moody’s Investors Service Inc., the cumulative contraction in gross domestic product from April through September could reach 7%.

Tusiad’s main concern is a lack of guidance from the government on how long the economy will be operating at its current, subdued pace, one of the people said. One solution discussed by the group’s board would be to announce a strict, national lockdown so that the spread of the virus could be slowed quickly. That approach would allow for businesses to plan for a certain period of slowdown, which would then be followed by a quick rebound in activity, the person said.

Istanbul’s Mayor Ekrem Imamoglu echoed that sentiment on Thursday, asking for a lockdown in Turkey’s largest city to slow the virus’s spread.

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