The pair of earthquakes that rocked Türkiye a week ago is estimated to inflict a loss corresponding to about 10% of the country’s gross domestic product (GDP), according to a report by a business group.
The magnitude 7.7 and 7.6 quakes struck nine hours apart in southeastern Türkiye, and severely hit northern Syria, on Feb. 6. They killed more than 31,640, with the toll expected to rise considerably as search teams recover more bodies from rubbles.
The disaster is projected to result in a loss of over $84 billion, the Turkish Enterprise and Business Confederation (TÜRKONFED) said Sunday, including $70.8 billion of damage to residential buildings and $10.4 billion loss in national income.
Losses to the labor force will cost the Turkish economy about $2.9 billion, it said.
The quakes left a trail of destruction across the southeastern region. Thousands of buildings, including homes and hospitals, were flattened in the 10 provinces affected by the tremors last Monday.
The disaster inflicted heavy damage on roads, pipelines, and other infrastructure in the area, where some 13.5 million people live.
TÜRKONFED’s estimates were based on 1999 earthquakes near Istanbul, which left about 18,000 people dead. The toll in the last week’s disaster has far outnumbered that of the 1999 earthquake.
International Monetary Fund (IMF) Executive Director Mahmoud Mohieldin on Sunday said the impact of last week’s earthquakes on Türkiye’s economic growth was unlikely to be as pronounced as after the quake that hit in 1999.
After the initial impact over the next few months, public and private sector investments in rebuilding could boost GDP growth in the future, Mohieldin said.
While officials and economists say the extent of the destruction is not yet clear, the earthquakes will add billions of dollars of spending to Ankara’s budget and are expected to cut economic growth by two percentage points this year.
TÜRKONFED’s report estimates the damage to infrastructure, including roads and power grids, as well as to hospitals and schools, may drive Türkiye’s budget deficit over 5.4% of GDP this year, compared to the official forecast of 3.5%.
President Recep Tayyip Erdoğan has said there would be a rapid reconstruction of infrastructure and houses.
IMF Managing Director Kristalina Georgieva said the earthquakes "brought tremendous tragedy on people but also a very significant impact on the Turkish economy."
Türkiye is known for having much lower debt levels than most countries. However, earthquake damage is also expected to hit production in the affected region, which is estimated to account for 9.3% of the country’s GDP.
Three economists, cited by Reuters, calculated GDP growth could drop 0.6 to 2 percentage points under a scenario where production in the region drops 50%, which they said would take six to 12 months to recover.
Growth could be 1 or 2 percentage points below the targeted 5%, a senior official told Reuters, saying that some of the investment resources foreseen in the budget will need to be used for these areas.
The southeast region hit by the earthquake accounts for 8.5% of Türkiye’s exports and 6.7% of imports. However, economists say the quakes are unlikely to affect Türkiye’s trade balance as exports and imports are expected to drop.
The government has pledged around TL 100 billion in relief for the region and Erdoğan said authorities would soon start rebuilding. He added that the government aims to build housing within one year for those left without a home in the 10 provinces affected.