Earthquake death toll over 19,000; analysts assess economic aftershocks

Thousands who lost their homes in a catastrophic earthquake huddled around campfires and clamoured for food and water in the bitter cold, three days after the temblor and series of aftershocks hit Turkiy and Syria, killing more than 19,000.

Rescuers continued their race to pull more people alive from the rubble, with the window closing to find trapped survivors. While stories of miraculous rescues briefly buoyed spirits, the grim reality of the hardship facing tens of thousands who survived the disaster cast a pall. In the Turkish city of Antakya, dozens of people scrambled for aid in front of a truck distributing children's coats and other supplies.

 

Ahmet Tokgoz, a survivor, called for the government to evacuate people from the devastated region. While many of the tens of thousands who have lost their homes have found shelter in tents, stadiums and other temporary accommodation, others have spent the nights outdoors since Monday’s 7.8 magnitude quake.

“Especially in this cold, it is not possible to live here,” he said. “People are warming up around campfires, but campfires can only warm you up so much. ... If people haven’t died from being stuck under the rubble, they’ll die from the cold.” 

Post-quake economic hit

A daunting economic landscape will exacerbate the humanitarian catastrophe wrought by a pair of earthquakes on Turkey, as early estimates of the damage point to mounting inflation and budget risks. Turkey has suspended trade on its main stock stock exchange following a sharp drop and the lira remains propped up by support measures. Meanwhile, Turkish financial assets whose movements remain unrestricted largely stabilized, with some even appreciating on Thursday.

Analysts are trying to gauge the exact impact of Monday’s tremors on Turkey’s $819 billion economy, which has seen massive imbalances amid unorthodox policies aimed at curbing inflation while also slashing interest rates. The plunge in equity prices and jump in bond yields after the quake pointed to fears over economic growth and excess spending. 

“The costs of this disaster strike the Turkish economy at a time when sentiment was already fragile,” said Nick Stadtmiller, head of product at Medley Global Advisors in New York. It also “increases the risk of another market meltdown given the pre-existing vulnerabilities in the currency and external account.”

While the Istanbul stock exchange was shut for a second day, the iShares MSCI Turkey UCITS ETF, an exchange-traded fund tracking Turkish assets in Europe that’s still trading, rebounded after three days of declines. It was 0.5 per cent higher as of 10:08 a.m. in London after losing 14 per cent over the previous three days. 

The yield on Turkey’s new dollar bond maturing in 2033 declined 2 basis points to 9.80 per cent on Thursday, compared with last week’s close at 9.61 per cent. The death toll across Turkey and neighboring Syria surpassed 19,000 as of Thursday morning, with thousands more trapped inside buildings damaged in the temblors that struck three days earlier. While the immediate focus is on rescue operations, the need to make plans for rebuilding before elections due in May is likely to put President Recep Tayyip Erdogan’s government under even more pressure to unveil enhanced spending plans.

Signs of changes to economic policy and what’s likely to be a massive spending increase were already evident on Wednesday as Erdogan visited the affected areas. He said a rebuilding blitz across 10 provinces would be completed within a year, announced a handout of 10,000 liras ($531) to each affected family, and said survivors housed in tents could be transferred to hotels on the coast.