Turkey hopes to start opening economy in late May: Sources

Turkey’s government has a tough balancing act ahead. It wants to begin reviving the economy in late May after a sharp coronavirus-induced slowdown, but also minimise the risk of a second wave of infections, a senior official said on Tuesday.

Separately, the head of a group of Turkish malls – which closed their doors independently last month – said the shopping centres are preparing to gradually reopen starting from May 11, depending on demand from retailers and approval from a health advisory board.

The emerging time frames reflect key developments: signs the outbreak may be ebbing in Turkey; unease over the economy’s rapid slide toward its second recession in less than two years; and the fact that other countries are loosening their coronavirus lockdowns.

“Recent studies have indicated that a reopening of the economy will be possible at the end of May, and current developments confirmed this. Steps will be taken to reopen without allowing a second wave,” the senior official told Reuters.

In keeping with that outlook, Turkish Airlines on Tuesday extended its cancellation of flights by a week to May 28.

Turkey has shuttered schools, restaurants and cafes to curb a surge in cases of the COVID-19 disease. Though some workplaces remain open, it has imposed partial stay-at-home orders, largely closed borders, and slowed domestic movement.

The country is seventh globally in confirmed cases of the new coronavirus at more than 112,000. And while some 2,900 people have died, there has been a fall in newly reported deaths over the last eight days.

“When we look at the case and death numbers, we have come to a positive point (and) there is a possibility for the economy to reopen,” said the senior official, speaking on condition of anonymity to the Reuters News Agency.

Small steps

Levels of trade, spending, manufacturing and consumer confidence have deteriorated due to containment measures and touched record lows this month. The lira fell on Tuesday to below 7 to the dollar, its weakest since the worst day of a 2018 currency crisis.

While Italy and some other countries are beginning to relax their lockdowns as infection rates have declined, others such as Russia are not budging or tightening restrictions.

President Recep Tayyip Erdogan has said Turkey aims to return to normal life after the end of the Islamic holy month of Ramadan in late May, and on Monday, he said the government would soon set out specific steps and dates.

The senior official said Turkey’s cabinet had on Monday discussed further possible tax adjustments and incentives to protect jobs and cut business costs, adding the government aims to boost hard-hit tourism and airline sectors.

Reopening “will allow positive GDP readings in the second half of the year and will minimise the annual contraction,” he said.

Some Turkish firms are already taking initial steps.

Private lender Denizbank said it had extended working hours in branches to help corporate borrowers. The head of an auto parts manufacturers’ association said reopening the economy in May would be a best-case scenario in which production would only fall some 15 percent and return to normal by September.

In an interview, Huseyin Alltas of the Council of Shopping Centres said a planned phased reopening from May 11 would initially exclude cinemas, playgrounds and restaurants – which the government shut down due to an especially high risk of coronavirus transmission – until approvals are given.

Shopping centres in hard-hit cities such as Istanbul – the worst area of the outbreak in Turkey – may remain closed longer but could reopen by June, the official said.

Sinan Oncel, head of the United Brands Association representing around 50,000 stores, said retailers would ask malls for rent discounts and aim for 50 percent of normal revenues over the first few months.