Direct costs from the destruction of physical structures in Turkey from the devastating earthquake on Feb. 6 could amount to 2.5 percent of gross domestic product, or $25 billion, Reuters reported, citing JPMorgan on Thursday.
The combined death toll from the earthquake in Turkey and Syria has climbed to more than 41,000, and millions are in need of humanitarian aid, with many survivors having been left homeless in near-freezing winter temperatures.
“The earthquake in Turkey has led to a tragic loss of life and carries meaningful economic implications,” economist Fatih Akçelik wrote in a note to clients.
JPMorgan also said it expected now that the central bank would cut interest rates by another 100 basis points at its meeting next week to 8 percent.
“The political leadership signaled further rate cuts even before the earthquake,” he said. “We do not rule out more rate cuts ahead of the elections originally scheduled for June 18. Yet, we believe that the policy rate is less relevant now as the monetary policy transmission mechanism is broken in Turkey.”