The two deadly earthquakes that devastated Turkey’s southeast early this month are estimated to have cost US$34,2 billion in physical damages, or about 4 percent of 2021 gross domestic product (GDP), according to a preliminary assessment by the World Bank.
The lender will also revise its 2023 GDP forecast for Turkey down by half a percentage point from its initial 3,5 percent-4 percent estimate, World Bank Turkey Director Humberto Lopez told reporters on a call Monday after presenting the assessment.
Reports of the impact of the disaster vary widely. Bloomberg Economics calculated that the quakes could shave off 1 percent of this year’s GDP, while JPMorgan Chase & Co said in a report that direct costs from the destruction of physical structures may reach US$25 billion, or 2,5 percent of the country’s GDP, with risks to the upside.
More than half the costs stem from residential buildings, the World Bank said, adding that “extensive” damage to infrastructure, including railways, highways and bridges, has also been taken into account.
The analysis excludes indirect or secondary effects of the tremors that killed more than 46 000 people in Turkey and Syria.
The group said recovery and construction costs could double when other factors such as increased prices and the cost of emergency responses are considered. “Based on global experience, recovery and reconstruction costs will be much larger” than the estimates.
The World Bank will provide Turkey with US$1,78 billion in assistance for relief and recovery work. It is offering immediate assistance of US$780 million through two existing projects in the country to rebuild basic municipal-level infrastructure, according to an earlier statement.– Bloomberg
