The bank added this is a "reasonable estimate" due to the
expected boost from reconstruction efforts later this year,
which will offset the negative impact to infrastructure and
supply chains.
"The earthquake affected to a large extent agricultural areas
and areas where there is light manufacturing, so spillovers to
other sectors are limited," EBRD chief economist Beata Javorcik
told Reuters.
Turkey and neighboring Syria have been rocked by a
devastating earthquake on Feb. 6 which has killed more than
41,000 people and left millions in need of humanitarian aid,
with many survivors having been left homeless in near-freezing
winter temperatures.
Growth for Turkey, the single biggest recipient of EBRD
funds, has been revised down to 3% from 3.5% in 2023, without
considering the impact of the earthquake in the estimates.
The bank added that growing external financing requirements
and political uncertainty associated with elections in 2023
create significant economic vulnerabilities.
Turkey's earthquake has thrown into disarray plans for
elections to be held by June, sparking frantic debate within
President Tayyip Erdogan's government and the opposition over a
possible delay.
"As depreciation of the Turkish lira outpaced inflation
since 2015, Turkey's exports have been growing fast, benefiting
from lower costs expressed in US dollars," the report added.
Turkey's lira hit a fresh record low on Wednesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Sticky inflation prompts EBRD to trim 2023 growth outlook for its region ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Jorgelina do Rosario in London Editing by Karin Strohecker and Matthew Lewis)
