New research suggests Turkey could limit economic damage and contain the coronavirus outbreak in 38 days by imposing an immediate full lockdown, Reuters said.
Turkey has put those under the age of 20 and over 65 under a strict curfew, and has shuttered businesses, closed borders, restricted travel, and adopted weekend curfews. But it has stopped short of imposing a full nationwide lockdown, and many businesses and factories remain open.
However, preliminary findings by five Turkish economists – published by the Yetkin Report on Thursday – suggest that Turkey faces a 17 percent economic contraction if it maintains its current course, as opposed to a 7.8 percent contraction if it imposed an immediate full lockdown that would better insulate the economy by concentrating and shortening the period of pain.
“When the full lockdown is delayed, it becomes harder to contain the pandemic, and thus the duration of the lockdown and hence the economic costs increase,” said the economists from Koç University in Istanbul and the University of Maryland.
The researchers said a strict lockdown as seen in China, in which people could only leave their homes for essential jobs and needs, would contain the coronavirus outbreak in 38 days in Turkey if imposed immediately, with a best-case scenario of an economic contraction of 7.8 percent. Their findings suggested that just a one-day delay in imposing a lockdown would extend that to 44 days and the economy would then contract by 8.2 percent.
Under current measures it would likely take Turkey around 200 days to contain the outbreak, the study said.
The study assumes that a stimulus package of around 7.8 percent of the GDP will be in place that is able to ensure companies can survive and rebound after the lockdown. The model ignores external borrowing. The researchers said more details would be available when they publish a research paper.
The study’s researchers included Selva Demiralp, Cem Çakmaklı, Sevcan Yeşiltaş, and Muhammed Ali Yıldırım from Koç University as well as Şebnem Kalemli-Özcan from the University of Maryland.
Istanbul’s Mayor Ekrem İmamoğlu has repeatedly called on the government to impose a full lockdown. On Tuesday he said that many people were not heeding the government’s voluntary stay-home advice, and added there was a 12-13 percent jump in public transport use on Monday after a weekend lockdown, compared to Friday.
The International Institute of Finance predicts Turkey’s economy will shrink by 2.7 percent this year. Moody’s ratings agency expects a cumulative gross domestic product (GDP) contraction of 7 percent in the second and third quarters before a rebound.