Trends in the World and Turkish Economy After the Pandemic

The COVID-19 Pandemic caused the world economy to contract sharply in 2020. While a rapid recovery process continues with the start of normalization in 2021, disruptions to global production chains and increasing inflation rates worldwide are at the top of the economic agenda. What happened in the economy and the economic policies implemented during the pandemic created the need for a widespread radical transformation in this area. For example, the direct income support measures applied during the pandemic have brought universal basic income and more egalitarian tax policy discussions up onto the agenda again. On the other hand, it can be seen that the asset purchase programs implemented by the leading central banks during the pandemic created new bubbles in many markets and financial assets. The difficulty of a “normalization” in monetary policy, especially in the USA, has clearly become apparent. The Turkish economy, on the other hand, was caught in the pandemic with high external vulnerabilities and an interest-currency bind. Preferring credit growth, mainly to keep economic activity alive during the pandemic, increased these vulnerabilities. The post-pandemic era seems to be shaping up as a period in which risks and vulnerabilities are very high on the one hand, and important policy changes will be on the agenda, both in the world and in the Turkish economy.