The economic bottleneck Turkey has entered has choked Cyprus. Increasing inflation, price hikes, rising unemployment and the budget crisis… The economy of the country in Turkish Republic of Northern Cyprus (TRNC) started to sound the alarm.
In the TRNC, whose economy is dependent on Turkey, the economic crisis hit the country as well as the government crisis. While the economy deteriorated in the TRNC, which used the Turkish lira after the increasing exchange rates in Turkey, the fact that Turkey sent a small amount of the money it promised to support, deepened the crisis in the country. While the queues are already rolling all around, the country is looking for ways to get out of both the economic and political crisis.
IMPOVERISHMENT RISES IN TRNC
In the TRNC, which cannot get what it wants from tourism, which is the biggest source of income, due to the Covid-19 pandemic, economic data has been showing a downward trend since the first quarter of 2021. Financial aid from Turkey, which makes up almost 25 percent of the TRNC budget, also accelerated the decline in the shortfall. The currency fluctuation in Turkey started to cause impoverishment not only in Turkey but also in the TRNC as the Turkish lira continued to melt against foreign currency.
UNEMPLOYMENT ROSE
This bad course in the TRNC economy also brought unemployment. Many hotel chains locked their doors with the pandemic blow that landed in the tourism area in the TRNC, where shops had its shutters down and factories stopped working. All these situations have increased unemployment. According to the results of the 2020 Household Labor Force Survey, the total unemployment rate in the TRNC was 10.1 percent. In 2019, this rate was 6.3 percent. The unemployment rate of the young population in the 15-24 age group was recorded as 29.3 percent. However, economists pointed out that these rates will increase even more in 2021.
BUDGET CRISIS ADDS SPICES TO THE SITUATION
On top of all this, a budget crisis broke out in the country. After the quorum problem in the Parliament, which brought the end of the UBP-DP-YDP minority government, the budget crisis began to emerge. According to the law, the draft budget of 2022 has to be passed by the Council of Ministers and sent to the Parliament by October 31, and it must be implemented as of January 1. However, in the country, which is in a political and economic uncertainty, the fate of the budget is also getting into trouble. Experts noted that the development in the budget will also cause disruption in payments.