Cost from the earthquakes that devastated Turkey could amount to $25 - $100 billion

1. Direct costs from the earthquakes that devastated Turkey earlier this month could amount to $25 billion, JPMorgan estimated on Thursday.

Analysts at the bank warned that the damage “carries meaningful economic implications,” and roughly equates to 2.5% of the country’s GDP.

JPMorgan said it expects the Turkish central bank to cut interest rates by another 100 basis points to 8% at a meeting next week, noting that the authorities signaled further cuts even before the earthquakes.

“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 Türkiye,” the analysts said.

Türkiye and neighboring Syria were hit by devastating earthquakes on February 6, with the combined death toll currently estimated at 41,000 people. Millions have been left in need of humanitarian aid, and many are also homeless after thousands of buildings were destroyed.

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 2. Rebuilding earthquake-ravaged houses and creating infrastructure facilities necessary for the reconstruction may cost $100 bln, said Eyup Muhcu, head of the architects’ chamber at the Union of Chambers of Turkish Engineers and Architects.

According to him, the disaster damaged 3.4 mln buildings and half of them will have to be demolished. "In order to rebuild these homes, you also have to build infrastructure and public facilities, so we can speak of a preliminary estimated cost of $100 bln for reconstruction," The Financial Times quoted him as saying on Friday.