TÜRKİYE’S ECONOMIC POLICY RESPONSE TO COVID-19
Covid-19, a new type of coronavirus first detected on December 12, 2019 in Wuhan, China, has caused a global pandemic. As of today, it has infected more than 125 million people around the globe, and it is spreading rapidly almost in all countries.
The Investment Office sends its heartfelt condolences to people who have lost their lives due to the pandemic, and wish a quick recovery for those infected.
Thanks to the great transformation Türkiye has made in the fields of services and infrastructure during the past 17 years, Türkiye is well prepared to face this pandemic.
Türkiye has been managing the Covid-19 situation since its inception. Policymakers, regulators, and all economic authorities are vigilantly following the developments and are taking all necessary measures to reassure the markets.
ECONOMIC STABILITY SHIELD PROGRAM
President Recep Tayyip Erdoğan announced a TRY 100 billion-Economic Stability Shield program on March 19. The package aims to secure employment, bolster the real sector, and address the prevailing concerns on liquidity and financing in the market.
- Tax declaration, VAT discount, and social security payments for April, May, and June have been postponed for a period of 6 months in the following sectors: retail, iron & steel, automotive, logistics, transportation, cinema & theater, accommodation, food & beverage, textile, and event organization.
- Accommodation tax will be delayed until November.
- The easement rights and revenue share payments related to hotel rentals for April, May, and June have been postponed for a period of 6 months.
- VAT has been lowered to 1% from 18% for a period of 3 months on domestic flights.
- Principal and interest rate payments of companies having cash flow problems due to Covid-19 outbreak precautions will be postponed for a minimum of 3 months. Additional financial support will be available if required.
- Inventory financing support will be available for exporters in order to protect capacity utilization rates.
- Principal and interest rate payments of artisans and craftsmen to Halkbank for April, May, and June will be postponed for a period of 3 months free of interest.
- The Credit Guarantee Fund limit will be increased from TRY 25 billion to TRY 50 billion. Loan priority will be channeled to companies and SMEs that need liquidity and that are showing a collateral deficit due to the negative effects of recent developments.
- Social credit packages will be incentivized under the most favorable and advantageous conditions for citizens.
- The mortgageable amount for houses under TRY 500,000 will be raised from 80% to 90%, meaning the minimum down payment has been reduced to 10%.
- Companies that default in April, May, or June due to the measures taken against the spread of the virus will have a “force majeure” note on their credit record.
- Minimum wage support will continue.
- Flexible and remote working models will be utilized to allow for operations to continue efficiently.
- Short Work Allowance will be facilitated, and the processes required to benefit from this opportunity will be eased and accelerated. Thus, the cost of employers will be reduced, while temporary income support will be provided to employees in workplaces that suspend its activities.
- The lowest pension wage will be increased to TRY 1,500.
- The Eid payment for the retired will be paid at the beginning of April.
- The Ministry of Family, Labor, and Social Services will provide financial support of TRY 2 billion for needy families.
- The 2-month compensation working period will be increased to 4 months to provide sustainability in employment.
- Follow-up programs including social services and periodical homecare visits will be initiated for the elderly who are above 80 years old and live alone.
- The maturities for repayments of rediscount credits, which will be due from April 2020 to June 2020, will be extended to October 2020 to December 2020, and the maximum maturity has been extended by 1 year. An additional 12 month-export commitment fulfillment time has been offered for the rediscount credits maturing in April, May, and June 2020.
ADDITIONAL MEASURES IN THE STIMULUS PACKAGE
Türkiye is taking all necessary measures to ensure continuity in economic activity.
MONETARY POLICY AND MACRO-PRUDENTIAL REGULATION
As part of the Economic Stability Shield Program, regulators in Türkiye took some measures to cope with the possible effects of the pandemic.
HEALTHCARE SYSTEM
Türkiye is well prepared to face Covid-19 pandemic with its strong healthcare system.
CITY HOSPITALS
In the past decade, Türkiye has accelerated the roll out of PPP city hospitals across the country.
ECONOMIC SUPPORTS
TIMELINE OF TÜRKİYE’S MEASURES AGAINST COVID-19