Pandemic, domestic woes dim Istanbul’s economic luster
Istanbul’s economy is estimated to have shrunk about 3% last year, even as Turkey’s gross domestic product grew 1.8%.
Istanbul — the powerhouse of the Turkish economy and an aspiring global hub — has suffered a notable decline amid the country’s economic turmoil over the past several years. While Turkey’s gross domestic product (GDP) expanded 1.8% in the pandemic-hit 2020, Istanbul’s economy is estimated to have shrunk about 3%, based on electricity consumption data.
The giant metropolis, which is home to some 16 million people, or a fifth of Turkey’s population, and contributes about a third of the country’s GDP, has lost much economic vigor since 2018 when Turkey’s economic woes began to deepen amid its transition to an executive presidency system. The pandemic has dealt heavy blows to the commerce, tourism and services sectors in Istanbul, aggravating unemployment and poverty in the city, which had thrived mainly on a construction boom and domestic consumption in earlier years.
On March 1, Turkey’s statistics agency announced that the country’s GDP grew 1.8% in 2020 — a costly achievement that bequeathed major fragilities to the economy. The regional breakdown of the GDP data will be available only in early 2022, but monthly electricity consumption data has traditionally been an accurate foretoken of growth. Indeed, the power consumption increase in Turkey last year corresponds to the 1.8% growth rate.
The electricity data reveals major differences between provinces. In the Mediterranean province of Antalya, the heart of Turkey’s vital tourism industry, for instance, electricity consumption decreased more than 16% in 2020, pointing to a staggering economic contraction in the region amid the pandemic.
