In figures … the implications of the US sanctions on Turkey’s economy

Days after the United States imposed sanctions on Turkey, the world’s attention turned to Ankara, bringing with it several questions about the impact of these sanctions on the Turkish economy.

The Turkish economy is again threatened after the United States imposed sanctions on Ankara, due to the purchase of a Russian air defense system, aimed at the largest development body of the Turkish defense industry, its president and 3 employees, amid the Turkish condemnation.

These sanctions coincide with the decision of European Union leaders during their meeting in Brussels on Thursday to impose sanctions on Turkey, in the context of its “illegal” actions in the Mediterranean against Athens and Nicosia, according to a Council spokesman. European.

The Turkish side faces a big dilemma, so how will the Ankara government deal with these sanctions, specifically their economic effects?

For his part, the head of Turkish defense industries, Ismail Demir, said in a tweet posted on his Twitter account that the US decision to impose sanctions on Turkey; For the purchase of the S-400 system.S-400), Will not hinder the work of your foundation in any way.

In a statement, Turkey’s Foreign Ministry also expressed its condemnation of the US decision, adding that Turkey will take necessary measures against this decision, which will inevitably affect the relations of the two countries, and will respond to it in the proper form and time.

The economic repercussions were voiced by Turkish economist Alaeddin Shinkular, who said that the US sanctions will not affect the lira, which has not declined in value in commercial markets after the decision, nor will it seriously affect the Turkish economy in the US. fields of international trade, tourism and defense, especially since Limited to a number of personalities and focused solely on the development of military manufacturing.

Sinkular told the Arab media: “The United States, in the history of its relations with Turkey, decided and implemented many sanctions, and Turkey got out of all of them with the benefit and national interest, such as not selling the structures of American military aircraft, That made the Turkish government build a factory that produces all kinds of structures for airplanes and not airplanes to this day.

He highlighted that the Turkish economy possesses elements of strength, including self-sufficiency in many sectors, the adoption of exports to many diverse countries besides the United States and the absence of the need for imported food and agricultural products, in addition to Turkey being a distinguished tourist country.

The Turkish economic expert added: “Although these sanctions are ineffective, the Turkish government will try to reach a compromise with Washington, and will also work to increase production, ration state expenditures and limit external borrowing.”

Meanwhile, the new US sanctions have raised questions about the state of the Turkish economy and the elements of its strength at the present time, as indicators point to the growth of the Turkish economy, registering a growth of 4.5% during the first quarter of 2020, and the agricultural sector has achieved a growth of 3%, while the industrial sector has achieved it. 6.2%, and the service sector (including the construction sector) posted a growth rate of 3.2%, which is a positive start, especially after 6% growth during the last quarter of 2019.

He also gave an indication of the success of the proactive measures that were taken before the arrival of the Coronavirus pandemic in Turkey, last March.

A Bloomberg survey estimated (BloombergThe return of Turkish GDP growth to a recovery of up to 5% in the last quarter of this year, up from 1% in the third quarter, prompting the agency to indicate that Turkey continued to enjoy a big economic boost even after that the lyre suffered the worst fall in the world. Emerging against the US dollar in earlier times.

The central bank is also trying to support the cash flow of issuing companies by rediscounting credits. In its effort to provide high-quality guarantees to banks, the central bank decided to transfer asset-backed securities and mortgage-backed securities to the collateral pool. The securities will be investment grade and at a reduced price that varies according to risk. Merit.

Notably, on March 18, Turkish President Recep Tayyip Erdogan announced the launch of the “Economic Stability Shield” package under which funds were allocated to 100 billion Turkish liras (15.4 billion US dollars ) to mitigate the effects of Corona, and the package included 19 elements, ranging from tax cuts, AND postponing payments owed to the State in terms of taxes, social security contributions, support for companies and exporters, and increased compensation to workers, artisans, pensions and others affected by the closures due to the pandemic.

On Monday, Washington imposed sanctions on Ankara against Turkey’s largest defense industries development body, its president, Ismail Demir, and 3 employees.

The US Treasury said the sanctions were imposed under the “Catsa Law,” the Anti-American Adversaries Act. After the announcement of the US sanctions, the Turkish lira increased by about 1%.

US Secretary of State Mike Pompeo said the sanctions against Turkey’s Defense Industries Authority are due to the purchase of the “S-400” system.S-400Anti-missile system.

Pompeo added that the sanctions include a ban on all US export licenses, an assets freeze and visa restrictions for the authority’s chairman, Ismail Demir, and other officials.

Turkey’s Foreign Ministry responded to Pompeo’s remarks, saying: It informed Washington of its response to the sanctions targeting Turkey’s Defense Industries Development Authority. While the domestic political scene showed unusual unity against sanctions, NATO took a pro-Turkey stance.

Turkey’s Foreign Ministry said Minister Mevlüt Çavuşolu discussed in a phone call Tuesday with his US counterpart Mike Pompeo Washington’s decision to impose sanctions on Turkey, due to the purchase of a Russian air defense system.

“Cavusoglu relayed our response to the US decision,” the ministry said.

And Turkish Defense Minister Hulusi Akar considered that the US sanctions on his country shake all the values ​​of the alliance between Ankara and Washington.

Akar considered that sanctions against a member state of the North Atlantic Treaty Organization “NATO” (NATONot only will it damage the spirit of the alliance, but it will also undermine trust between the allies.

He added that the Turkish government will take all measures to protect the safety of its citizens and his country, which is under dangerous air and missile threats, as he himself said.

For its part, the Turkish parliament on Tuesday showed uncommon unity of its kind in condemning the US sanctions. He said that the country would not hesitate to protect itself against threats.

In a joint statement, 4 of the five main parties in Parliament emphasized that relations with the United States must be based on mutual respect and that the sanctions imposed due to the country’s purchase of the Russian S-400 air defense system ” they are not in line with the spirit of the alliance. “

The statement continued: “We ask the United States to reverse this grave error immediately.” He added that Turkey “will not back down from sanctions or threats.”