Turkey counts first blow to its economy due to uprising

Economic and political analysts express the view that the violence incidents in Turkey in the last 24hours will be a huge blow to the economy of the country.

Concerns are intensified after the directives issued by the British Foreign Office, recommending British citizens to avoid demonstrations. Each year more than 1.7 million British tourists visit Turkey for their summer vacation, so the cost of any cancellations will be enormous.


Financial analysts are studying all options and measure the impact of the latest developments, while indicative of the prevailing climate is today’s drop of the Istanbul Stock Exchange index, which closed with a 10.47% decrease, marking a negative record in the past few years.


Turkish assets have plunged in recent days, liquidations have intensified due to investor concerns about the impact of early reduction of stimulus from Fed, while bond yields have increased dramatically, signaling the investors’ reduced confidence.


The statement issued a few hours ago by the rating agency Standard & Poor's is of particular interest, disclosing their decision to postpone the international meeting that was due to take place tomorrow in Constantinople "due to the recent developments in the city."

Analysts estimate that the Turkish lira will accept the first blow, with a corresponding impact on the capital market and bonds.

However, the biggest hit is expected to be delivered on tourism even worse at the beginning of the summer season.

 
The shock only for Constantinople is expected to be unprecedented. Investment in hotels and malls in the Turkish city in recent years has been enormous. A sharp decrease, even a temporary one, in tourism in Istanbul will bring thousands of layoffs and a dramatic rise of unemployment in the city.

Indicative of the whole situation that is currently taking shape, is the announcement made today by Turkish minister of Interior for the initial estimates on the cost of damages. Güler said the losses exceed 20 million Turkish pounds, or approximately 8.2 million euros.