Turkey quake damage estimated at $25b

UN appealed for over $1b in funds for relief operation

LONDON:

Direct costs from the destruction of physical structures in Turkey from the devastating earthquake on February 6 could amount up to 2.5% of gross domestic product or $25 billion, JPMorgan confirmed on Thursday.

The combined death toll from the quake in Turkey and Syria has surged to more than 41,000. Making this the deadliest quake in both countries’ modern history with millions still in need of humanitarian aid, as many survivors have been left homeless in near-freezing winter temperatures.

UN Aid Chief Martin Griffiths, who visited Turkey last week, said the people have “experienced unspeakable heartache,” adding: “We must stand with them in their darkest hour and ensure they receive the support they need.

On Thursday, the United Nations appealed for more than $1 billion in funds for the Turkish relief operation, just two days after launching a $400 million appeal for Syria. “The earthquake in Turkey has led to a tragic loss of life and carries meaningful economic implications,” economist Fatih Akcelik wrote in a note to clients.

Moreover, JPMorgan expects that the central bank would cut interest rates by another 100 basis points at its meeting next week to 8%.

“The political leadership signalled further rate cuts even before the earthquake,” he said. “We do not rule out more rate cuts. Yet, we believe that the policy rate is less relevant now as the policy transmission mechanism is broken in Turkey.”

Catastrophe modelling firm Karen Clark & Company (KCC) also said on Thursday it expects insured losses of $2.4 billion from the devastating dual Kahramanmaras earthquakes that hit Turkey earlier this month.

Published in The Express Tribune, February 17^th, 2023.

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