The fluidity of the market must be maintained

Faculty member from the Department of Accounting and Finance at Cyprus International University, Asst. Prof. Dr. Asil Azimli asserted that the entire world has been experiencing an invisible war due to COVID-19, and evaluated the possible effects of this situation on the Turkish Republic of Northern Cyprus (TRNC) economy.

Drawing attention to the point that there is a decrease in capital production due to social distance, Azimli mentioned that this situation may lead to a lack of supply, serious job losses, supply chain breaks and cost increases, loss of qualified workforce and productivity, increase in indebtedness ratio and ultimately bankruptcies.

Asst. Prof. Dr. Azimli added that this general situation will also shape the household budget, "therefore, it will also have serious effects on consumption habits".

Declaring that the COVID-19 outbreak will hit the economy with supply and demand shocks, Azimli also mentioned that this situation will differ on a sectorial basis. It was noted that while some companies will be more affected than others by this process, some would be less affected, and some (supermarkets) would even make a profit in the short term.

Emphasizing that the service-based sectors are at a slightly more vulnerable point in this process, Azimli said, “For example, there will be no additional visits to the hairdressers for hairdressing services that are not carried out due to the social distance process.”

Azimli drew attention to the fact that the majority of the TRNC revenues are dependent on education, tourism and their subsidiary sectors and said “the demand shock for TRNC is a serious risk. If consumption drops, tax, that is, the income of the government also decreases. In this context, the situation is a bit negative for TRNC, as its income is largely devoted to the consumption taxes, and the majority of expenses go for the payment of the salaries of public employees”.

During this temporary period, the market must keep liquid which will prevent bankruptcy and unemployment.

Asst. Prof. Dr. Azimli stated that the decision-makers should be able to postpone their tax and debt obligations as much as possible and make arrangements for the rents, along with these, "the most important thing is to provide low-interest, generous repayment loans to businesses".

Azimli drew attention to the fact that the majority of the TRNC revenues are dependent on education, tourism and their subsidiary sectors and said “the demand shock for TRNC is a serious risk. If consumption drops, tax, that is, the income of the government also decreases. In this context, the situation is a bit negative for TRNC, as its income is largely devoted to the consumption taxes, and the majority of expenses go for the payment of the salaries of public employees”.

During this temporary period, the market must keep liquid which will prevent bankruptcy and unemployment.

Asst. Prof. Dr. Azimli stated that the decision-makers should be able to postpone their tax and debt obligations as much as possible and make arrangements for the rents, along with these, "the most important thing is to provide low-interest, generous repayment loans to businesses".